The level of exports is affected by the real interest rate because
A) the level of imports depends on the real interest rate.
B) the level of imports depends on the real exchange rate.
C) the level of exports depends on the level of foreign income.
D) the level of exports depends on the real exchange rate.

Question

Quizplus · Accepted Answer

The level of exports is influenced by the real exchange rate because a more favorable real exchange rate can make a country's goods cheaper for foreign buyers, thereby increasing exports.

The Level of Exports Is Affected by the Real Interest