Other things the same, when the real exchange rate of the dollar depreciates, Canadian goods become more attractive to Canadian residents, but less attractive to foreign residents.

Question

Quizplus · Accepted Answer

When the real exchange rate of the dollar depreciates, Canadian goods become relatively cheaper for Canadian residents compared to foreign goods. However, for foreign residents, Canadian goods become relatively more expensive compared to goods from other countries, making them less attractive.

Other Things the Same, When the Real Exchange Rate of the Dollar