Question

What happens to the cost of foreign goods when the dollar is strong?

Question 8 options:

The cost of foreign goods stays the same.


The cost of foreign goods is lower.


The cost of foreign goods rises briefly, then falls.


The cost of foreign goods rises.

Answer 1

The cost of foreign goods rises briefly,then falls

Answer 2

Answer:

The cost of foreign goods is lower.

Explanation:

When the dollar is strong its value increases which means that you can get more foreign currency for each dollar. This generates that for people in the US it will be attractive to buy foreign products as they will cost less. So, according to this,  when the dollar is strong, the cost of foreign goods is lower.