Answer to Question #228704 in Macroeconomics for Ashish Rawat

Question

Due to Covid the price of U.S. dollar has jumped during The year which has become one of reason of tension for trades

What will be The affect on trade.

Answer 1

The U.S dollar has jumped thus the creation of dominance on their currency. This factor will affect trade and the likelihood of an economic recession. Exports versus imports variance as well as supply chains and demand for commodities. For example, a rise in exports costs of U.S goods will be expensive. Thus the higher the price, the lower the number of U.S goods exports. Automatically, a drop in goods exports leads to a reduction in the gross domestic product( GDP) which is a loss. Generally, it will be of a negative impact on trade.