Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 10

True or false "U.S. exports create a demand for foreign currencies; foreign imports of U.S. goods generate supplies of foreign currencies." Explain. Would a decline in U.S. consumer income or a weakening of U.S. preferences for foreign products cause the dollar to depreciate or appreciate Other things equal, what would be the effects of that depreciation or appreciation on U.S. exports and imports