a.
the exchange rate falls. Other things the same, it will cost more euros to buy U.S. goods.
b.
the exchange rate rises. Other things the same, it will cost fewer euros to buy U.S. goods.
c.
the exchange rate falls. Other things the same, it will cost fewer euros to buy U.S. goods.
d.
the exchange rate rises. Other things the same, it will cost more euros to buy U.S. goods.
1 answer
The correct answer is:
c. the exchange rate falls. Other things the same, it will cost fewer euros to buy U.S. goods.
When the dollar depreciates against the euro, it means that the dollar is weaker compared to the euro, leading to a lower exchange rate. This results in it costing fewer euros to purchase U.S. goods, making them cheaper for Eurozone consumers.
