Economics: Principles & Policy
Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 35, Problem 1DQ
To determine

The effects of exchange rates between the dollar and these currencies.

Expert Solution & Answer
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Explanation of Solution

In recent times, most of the products that used by the students were produced abroad. For example, cloths, and shoes may be imported from Asian nations, fruits from central America, car from Japan and so on. If America imposes some import restrictive measures, then it will reduce the availability of foreign products in the domestic market. As a result there is a fall in the supply of the dollar on international market and this would lead to an appreciation of dollar.

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