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Question
The U.S. economy is experiencing large trade deficits. Suppose that the U.S. considers devaluing its dollar against a foreign currency to improve the trade balance. What type of currency contracting would improve the U.S. trade deficit?
a. The U.S. import contracts are written in foreign currency and the U.S. export contracts are written in dollar.
b. The U.S. import contracts are written in dollar and the U.S. export contracts are written in foreign currency.
c. Both of the U.S. import and export contracts are written in dollar.
d. Both of the U.S. import and export contracts are written in foreign currency.
Answer
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