Question

when the US dollar decreases in value relative to foreign currencies the demand for US exports quizlet

Answer 1

When the US dollar decreases in value relative to foreign currencies the demand for US then "US exports are more price competitive when the dollar is weaker. A rise in demand will result from cheaper exports."

What are the factors effecting US doller?

The choice of whether to purchase or sell dollars is mostly determined by the state of the economy. Because of the perceived security as well as the ability to generate an adequate rate of returns on investment, a robust economy will draw in investment from around the world.

Some key features of US doller are-

• A nation can attract foreign investment to reduce its trade imbalance if its economy is strong.
• That makes it possible for the United States to continue serving as the driving force behind global consumption, despite the fact that it is a debtor country that borrows money for consumption.
• This enables other nations to trade to the United States and maintain the expansion of their own economies.
• The U.S. dollar have served as both a national currency for commerce and international finance and as a pillar of the world economy.
• The relative value of the dollar is influenced by US economic activity and prospects, similarly to any other fiat currency.
• Market psychology & geopolitical risk, in addition the fundamental and technical considerations, also affect the value of the dollar on the international market.

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