Question
Which of the following would cause the us dollar to appreciate against the euro? a. Interest rates in the US decrease b. American consumers prefer
Which of the following would cause the us dollar to appreciate against the euro?
a. Interest rates in the US decrease
b. American consumers prefer to buy European goods
c. European consumers boycott American goods
d. GDP in the European Union decreases
e. GDP in the European Union increases.
Coursehero expert answer says d. GDP in the European Union decreases. However, if GDP in EU decreases, that would mean less demand for US goods from EU. This would mean lower demand for USD and hence USD will depreciate not appreciate. Shouldn't the answer be e. GDP in the European Union increases?
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