Exchange-rate volatility creates a bias against _____ goods and a bias towards _____ domestic goods.
A) imported, foreign
B) imported, domestic
C) domestic, imported
D) new, old
E) old, new

Question

Quizplus · Accepted Answer

Exchange-rate volatility makes imported goods more unpredictable in terms of cost, leading to a preference for domestic goods which are not subject to exchange-rate changes.

Exchange-Rate Volatility Creates a Bias Against _____ Goods and a Bias