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Scenario 1: Suppose that there is a banking crisis in Europe which makes people fear for the value of their assets in Europe so that
Scenario 1: Suppose that there is a banking crisis in Europe which makes people fear for the value of their assets in Europe so that they desire to purchase more U.S assets. Refer to Scenario 1. What would happen to the dollar? a. It would appreciate in foreign exchange markets making U.S. goods more expensive compared to foreign goods. b. It would depreciate in foreign exchange markets making U.S. goods less expensive compared to foreign goods. c. It would appreciate in foreign exchange markets making U.S. goods less expensive compared to foreign goods. d. It would depreciate in foreign exchange markets making U.S. goods more expensive compared to foreign goods
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