Assume that the nominal exchange rate decreases by 6%. If both domestic and foreign prices do not change, we know that:
A) foreign goods are now relatively more expensive.
B) foreign goods are now relatively cheaper.
C) domestic goods are now relatively more expensive.
D) Both A and C.
E) Both B and C.

Question

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The Answer of Assume that the nominal exchange rate decreases by 6%. If both domestic and foreign prices do not change, we know that:
A) foreign goods are now relatively more expensive.
B) foreign goods are now relatively cheaper.
C) domestic goods are now relatively more expensive.
D) Both A and C.
E) Both B and C.

Assume That the Nominal Exchange Rate Decreases by 6