If the real exchange rate of the U.S.dollar falls,U.S.net exports will fall.

Question

Quizplus · Accepted Answer

The real exchange rate of a currency falling means that the currency is becoming weaker and can buy fewer goods and services abroad. This can actually increase U.S. net exports as foreign buyers find U.S. goods cheaper and more attractive. Therefore, a falling real exchange rate of the U.S. dollar would not necessarily lead to a fall in U.S. net exports.

If the Real Exchange Rate of the U