If the exchange rate rises, then the quantity of dollars demanded because with the higher u. S. Exchange rate, u. S. Exports .

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04-08-2022
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If the exchange rate rises, then the quantity of dollars demanded because with the higher u. S. Exchange rate, u. S. Exports .

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If the exchange rate rises, then the quantity of dollars demanded decreases because with the higher u. S. Exchange rate, u. S. Exports decreases.

What happens when the exchange rate decreases?

A fall in the exchange rate is known as a depreciation in the exchange rate (or devaluation in a fixed exchange rate system).
It means the currency is worth less compared to other countries.
For example, a depreciation of the dollar makes US exports more competitive but raises the cost of importing goods into the US.

What does a rise in exchange rate mean?

When an exchange rate changes, the value of one currency will go up while the value of the other currency will go down.
When the value of a currency increases, it is said to have appreciated.
On the other hand, when the value of a currency decreases, it is said to have depreciated.

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