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If the exchange rate​ rises, then the quantity of dollars demanded​ ________ because with the higher u. S. Exchange​ rate, u. S. Exports​ ________.

Sagot :

If the exchange rate​ rises, then the quantity of dollars demanded​ decreases because with the higher u. S. Exchange​ rate, u. S. Exports​ decreases.

What happens when the exchange rate decreases?

  • A fall in the exchange rate is known as a depreciation in the exchange rate (or devaluation in a fixed exchange rate system).
  • It means the currency is worth less compared to other countries.
  • For example, a depreciation of the dollar makes US exports more competitive but raises the cost of importing goods into the US.

What does a rise in exchange rate mean?

  • When an exchange rate changes, the value of one currency will go up while the value of the other currency will go down.
  • When the value of a currency increases, it is said to have appreciated.
  • On the other hand, when the value of a currency decreases, it is said to have depreciated.

Learn more about Exchange rate and export here:

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