If the inflation rate in the U.S.is lower than in other countries,this would be expected to

A) increase U.S.exports.
B) reduce U.S.imports.
C) increase the demand for dollars.
D) All of the choices are true.

Question

Kienaz Ferguson · Accepted Answer

Final Answer : D, Explanation :  When the inflation rate in the United States is lower than in other countries, it makes goods produced in the U.S. relatively cheaper compared to goods produced in other countries. This cause an increase in demand for U.S. exports (A), which can increase trade and enhance economic growth. At the same time, lower inflation also means lower prices for goods within the United States, making imports relatively more expensive; this can reduce U.S. imports (B). Lastly, the increase in demand for U.S. products can drive up the demand for the U.S. dollar, leading to an increase in the value of the currency, and increase the demand for dollars (C). Therefore, all the choices are true (D).

If the inflation rate in the U.S.is lower than in other countries,this would be expected to

A) increase U.S.exports.
B) reduce U.S.imports.
C) increase the demand for dollars.
D) All of the choices are true.

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Learning Objectives

Learning Objectives

Related questions

If the inflation rate in the U.S.is lower than in other countries,this would be expected toA) increase U.S.exports.B) reduce U.S.imports.C) increase the demand for dollars.D) All of the choices are true.

Definitions

Learning Objectives

Learning Objectives

Related questions

If the inflation rate in the U.S.is lower than in other countries,this would be expected to

A) increase U.S.exports.
B) reduce U.S.imports.
C) increase the demand for dollars.
D) All of the choices are true.