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    Depreciation in US Dollars

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    Here are a few questions/concepts that I'd like help understanding. The explanations are just in 'words'- no graphs.

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    see the attched file. Thanks

    1. Explain whether you agree or disagree with the following statement and explain why:
    "Other things equal, a depreciation of the U.S. dollar is bad news for U.S. consumers and good news for U.S. exporters."
    Correct: Depreciation in US$ would mean that imports will become costly. Thus, products, which are imported, will cost more. Besides, products which use imported raw material or supplies will also become costly. However, the cost of goods produced 100% domestically would remain same. Thus, US consumers will have to pay more for the same basket of goods they are buying currently. Hence, it is a good news for them.
    For exporters, depreciation in US$ means that their products will become cheaper as compared to their foreign ...

    Solution Summary

    Depreciation in US dollars is explained.