Answer: a. Cause the dollar to appreciate
Explanation:
A decrease in price levels is known as DEFLATION and deflation increases the value of the domestic currency in the short run.
Look at it this way, if you were able to buy more things with the same amount of money, wouldn't that mean that the strength of that currency has increased?
That's the basic concept here, holding other things constant, if prices drop in the US, the value of the Dollar RISES.
