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    Effect of Currency Appreciation on Imports and Exports

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    Suppose the US dollar appreciates in its value against the Euro.

    (a) If you were exporting US made products to Europe, what would happen to prices of your exports?

    (b) If you were importing to the US products made in Europe, what would happen to the prices of your imports?

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    Solution Preview

    a) I still want the same number of dollars for my products, but because the US dollar has become more ...

    Solution Summary

    This solution explains what would happen to the prices of imports and exports if the value of the U.S. dollar appreciated against the Euro.