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How does a decrease in the exchange value of the American dollar affect the ability of the United States to trade with other nations?


If the value of the dollar falls, the United States can afford fewer goods and services from other countries.

If the U.S. dollar’s value falls, it is less expensive for Americans to import products from other countries.

As the value of the U.S. dollar falls, prices for goods and services in other countries will go down.

When the dollar’s value falls, other countries buy fewer goods and services from the United States.

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buchinnamani208

Answer:

If the value of the dollar falls, the United States can afford fewer goods and services from other countries

Explanation:

A decrease in dollar value means more dollar to purchase another currency as it has to do with purchasing/importing the goods or services of another country. Every country on the international market strives to maintain a balance in the value of its currency so as to avoid problems(there are other problems too) such as the one mentioned above. A devaluation in the dollar for instance would mean less imports as a result of expensive goods, although it could discourage imports and help increase exports as compared to imports(used by countries in striking a balance), it could also mean that goods that can't be substituted in the local country may become expensive to import.

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