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Q. |
To financelarge U.S. federal Budget deficits, the Federal Reserve increases the money supply. This leads to a surplus of dollars world wide. What happens to the U.S. dollar and trade? |
A. | The dollar appreciates in value, stimulating imports but curtailing exports. |
B. | The dollar appreciates in value, stimulating exports but curtailing imports. |
C. | The dollar depreciates in value, stimulating imports but curtailing exports. |
D. | The dollar depreciates in value, stimulating exports but curtailing imports. |
Answer» D. The dollar depreciates in value, stimulating exports but curtailing imports. |
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