Answer to Question #181047 in Macroeconomics for izzy

Question

For each of the following statements explain if they are true or false:

a. As the dollar appreciates more Americans will travel abroad.

b. As the dollar appreciates American imports will fall.

c. As the dollar appreciates Disney World will see more foreign tourists.

d. As the dollar appreciates agains the Euro, European exporters of cars will benefit.

Answer 1

a. As the dollar appreciates more Americans will travel abroad.

It's true, because the real value of dollars becomes higher in other countries.

b. As the dollar appreciates American imports will fall.

It's false, because import becomes more profitable in this case.

c. As the dollar appreciates Disney World will see more foreign tourists.

It's false, because such trips will become more expensive for foreign tourists.

d. As the dollar appreciates agains the Euro, European exporters of cars will benefit.

It's true, because now they can earn more in U. S. market.