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If Our Exchange Rate Depreciates, Ceteris Paribus

Question 108

Multiple Choice

If our exchange rate depreciates, ceteris paribus,


A) exports become cheaper for foreigners, while imports become more expensive for domestic residents; our net exports are likely to increase.
B) exports become more expensive for foreigners, while imports become cheaper for domestic residents; our net exports are likely to decrease.
C) exports become more expensive for foreigners, while imports become cheaper for domestic residents; our net exports are likely to increase.
D) exports become cheaper for foreigners, while imports become more expensive for domestic residents; our net exports are likely to decrease.

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