20) Name someone who would beneft f rom a depreciation in the dolar (a weak doll
ID: 1128622 • Letter: 2
Question
20) Name someone who would beneft f rom a depreciation in the dolar (a weak dollar), Brioty explain 21) Let the exchange rate between the U.S, dolar and the U.K pound be $1-1. Suppose a sweater in the UK is £70. According to the theory of in the U.S. is $80 and the price of the same sweater purchasing power party, will the dollar appreciate or depreciate against the pound? 22) Why is the tax multiplier smaller than the spending multliplier? wizdwers and cantynriment tom the last day of class? the one with coke,Explanation / Answer
Question 20
An US exporter of any good or service would benefit from a depreciation in the dollar.
This is because depreciation of dollar implies that per unit of foriegn currencies would now be able to purchase more number of dollars.
This will make US-made goods or US-provided services relatively cheaper for foriegn nationals and they will demand more of these.
This will enable the US exporters to sell more and thus benefit in terms of increased sales and profit.
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