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Which of the Following Is True

Question 123

Multiple Choice

Which of the following is true?

A) If the Australian dollar depreciates, the Australian trade deficit decreases, since Australian products become cheaper to foreigners.
B) If the Australian dollar depreciates, the Australian trade deficit decreases, since Australian products become more expensive to foreigners.
C) If the Australian dollar depreciates, the Australian trade deficit increases, since Australian products become more expensive to foreigners.
D) If the Australian dollar appreciates, the Australian trade deficit decreases, since Australian products become cheaper to foreigners.
E) If the Australian dollar appreciates, the Australian trade deficit decreases, since Australian products become more expensive to foreigners.

Correct Answer: