AP Macroeconomics Question 25: Answer and Explanation

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Question: 25

2. Depreciation of the dollar is most likely to

  • A. increase imports
  • B. increase travel abroad
  • C. increase exports
  • D. decrease a trade surplus
  • E. increase a trade deficit

Correct Answer: C


C Depreciation of the dollar will make American goods cheaper to export, and will make imports more expensive for Americans. A direct consequence is that American companies will export more and demand for foreign goods in America will decrease. Therefore the answer is (C).