Question

An increase in the dollar price of other currencies tends to cause a. U.S. goods to be cheaper than foreign goods. b. U.S. goods to be more expensive than foreign goods. c. foreign goods to be more expensive to residents of foreign nations. d. foreign goods to be cheaper to residents of the United States.

Answer 1

Answer: C. foreign goods to be more expensive to residents of foreign nations

Explanation: When the dollar price rises in a country that the official currency is not the dollar, purchase of foreign goods becomes expensive.

For example, if in a country like Nigeria, 1 dollar equals 360 Naira and a resident has been purchasing goods outside Nigeria using the dollars, if 1 dollar increases to 400 naira, that becomes more expensive for the Nigerian (foreigner). Because the Nigerian now have to cough out 400 naira for 1 dollar as against the for 360 naira for 1 dollar.

Answer 2

Answer:

a. U.S. goods to be cheaper than foreign goods.

Explanation: