The higher the exchange rate, all other things remaining the same, the
A)smaller is the volume of Canadian imports.
B)smaller is the supply of Canadian imports.
C)greater is the volume of Canadian imports.
D)greater is the supply of Canadian imports.
E)greater is the demand for Canadian exports.

Question

Quizplus · Accepted Answer

A higher exchange rate means that the domestic currency has appreciated, making foreign goods cheaper for domestic consumers, thus increasing the volume of imports.

The Higher the Exchange Rate, All Other Things Remaining the Same