If the real exchange rate of the dollar__________, then U.S. exports will _________.
A) depreciates; decrease
B) appreciates; increase
C) appreciates; decrease
D) depreciates; become more expensive

Question

Quizplus · Accepted Answer

When the real exchange rate of the dollar appreciates, it means that the dollar has become stronger relative to other currencies. This makes U.S. goods more expensive for foreign buyers, leading to a decrease in U.S. exports.

If the Real Exchange Rate of the Dollar__________, Then U