explain the mechanismby which an economic expansin is produced in the U.S if U.S.dollar deperciates?

Question

assume thatthe US dollar depereciates or declines in value relative to currencies of America's trading partners.explain the mechanism by which this will produce an economic expansion in the U.S.

Answer 1

and to add to the first answerer...

imports become more expensive, so consumers in the US switch to locally produced alternatives (eg US made cars rather than imported ones). This benefits import-competing firms in the US.

Therefore, a depreciation causes exports to increase (because they are more competitive) and imports to fall (because they are less competitive).

X goes up and M goes down, both of which make GDP go up - GDP = C+I+G+X-M

Answer 2

When USD depreciates against other currencies, American products become cheaper in other countries. This situation causes the demand for American products to rise and boost US exports. As you may know, one of the components of the National Income Identity, is the net exports (exports minus imports). Therefore, a rise in net exports causes an increase in the GDP.