If the dollar appreciates relative to foreign currencies, we would expect?

a. multiplier to decrease
b. coutry's exports and imports to both fall
c. country's net exports to rise
d. country's net exports to fall

Answer:
D. A stronger dollar means more buying power so imports into the U.S. go up. It also means American goods & services become more expensive vis-a-vis foreign G&S, so U.S. exports would fall. Exports fall, Imports rise = net exports fall.

(PS the 1st & 2nd sentences are two different ways of saying almost the same thing)
Do your own homework, but D.

In that instance, the exchange rate effect would cause other countries to afford less of our goods, and thus, exports would decrease.

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