The ________ the exchange rate, the ________ are foreign-produced goods and hence the smaller the quantity of dollars supplied.
A) lower; more expensive
B) lower; cheaper
C) greater; cheaper
D) greater; more expensive

Question

Quizplus · Accepted Answer

A lower exchange rate means that foreign currencies are stronger compared to the domestic currency, making foreign-produced goods more expensive in terms of the domestic currency. This reduces the quantity of dollars supplied as fewer people can afford or are willing to exchange their dollars for more expensive foreign goods.

The ________ the Exchange Rate, the ________ Are Foreign-Produced Goods

The the Exchange Rate, the Are Foreign-Produced Goods