General Education Development (GED) Practice Exam

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What is the consequence of a stronger dollar for exporters?

  1. Increased sales abroad

  2. Decreased sales abroad

  3. Higher profits domestically

  4. More competitive pricing for their goods

The correct answer is: Decreased sales abroad

A stronger dollar typically means that U.S. goods and services become more expensive for foreign buyers. As the value of the dollar increases compared to other currencies, it takes more of the foreign currency to purchase the same U.S. products. This price increase can lead to decreased demand for these products in international markets, resulting in lower sales abroad for exporters. In contrast, if the dollar were weaker, U.S. goods would be less expensive to foreign consumers, likely boosting sales in those markets. Thus, the clear consequence of a stronger dollar for exporters is decreased sales abroad due to higher prices for international customers.

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