Appreciation vs. Depreciation
High demand for US exports typically results in the ___________ of the US dollar
Appreciation
When US currency appreciates, the price of foreign goods (for Americans) will ___.
Fall
What happens to the value of a nation's currency when they export more of their products to another country than are imported?
It appreciates
When the US is trading with Mexico and the US dollar deprecaites how is the Peso affected?
It appreciates in value
What happens to the value of a nation's currency when people from another country import more of their products?
It appreciates; goes up in value
When the US is trading with Canada and the US dollar apprecaites how is the Canadian dollar affected?
It depreciates
What happens to the balance of trade when a nation's currency appreciates?
It worsens (imports go up while exports go down)
Do US exporters benefit more or less when the dollar is strong?
Less
Who would benefit from the appreciation of the Mexican Peso vs. the US Dollar?
Mexican Consumers of American goods
Who would benefit from the depreciation of the US Dollar vs. the Mexican Peso?
Mexican Consumers of American goods
Do US exporters benefit more or less when the dollar is weak?
More
When US currency depreciates, the price of foreign goods (for Americans) will ___.
Rise
When a country's currency appreciates, how are imports and exports affected?
The cost of imports decreases⬇️ while the cost of exports increases⬆️
When a country's currency depreciates, how are imports and exports affected?
The cost of imports increases⬆️ while the cost of exports decreases⬇️
Who would benefit from the appreciation of the US Dollar vs. the Mexican Peso?
US Consumers of Mexican goods
Who would benefit from the depreciation of the Mexican Peso vs. the US Dollar?
US Consumers of Mexican goods
Who would be helped by a weak US Dollar?
US Exporters
Who would be hurt by a strong US Dollar?
US Exporters
Who would be helped by a strong US Dollar?
US importers
Who would be hurt by a weak US Dollar?
US importers
Depreciation
a decrease in the value of a currency relative to other currencies
Appreciation
an increase in the value of a currency relative to other currencies
What happens to the balance of trade when a nations currency depreciates?
it improves (imports go down while exports go up)
