A rise in the Canadian-dollar price of foreign currency,other things being equal,causes Canada's net export (NX)function to shift ________ and ________.
A)upward; become flatter
B)upward; become steeper
C)downward; become flatter
D)downward; keep the same slope
E)downward; become steeper

Question

Quizplus · Accepted Answer

A rise in the Canadian-dollar price of foreign currency makes Canadian goods and services more expensive relative to foreign goods and services, leading to a decrease in Canadian exports and an increase in Canadian imports. This causes the net export function to shift downward and become flatter.

A Rise in the Canadian-Dollar Price of Foreign Currency,other Things