When the yuan-dollar real exchange rate appreciates,________.

Question

Quizplus · Accepted Answer

When the yuan-dollar real exchange rate appreciates, it means that the yuan has become more valuable relative to the dollar. This makes Chinese goods more expensive for U.S. consumers, which decreases U.S. net exports to China. At the same time, it makes U.S. goods more affordable for Chinese consumers, which increases Chinese net exports to the United States. Therefore, the correct answer is C.

When the Yuan-Dollar Real Exchange Rate Appreciates,________