Which of the following could be a consequence of a depreciation of the U.S. real exchange rate?
A)John, a French citizen, decides that Iowa pork has become too expensive and cancels his order.
B)Nick, a U.S. citizen, decides that the trip to Nepal he's been thinking about is now made affordable by the depreciation.
C)Roberta, a U.S. citizen, decides to import fewer windshield wipers for her auto parts company.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A depreciation of the U.S. real exchange rate makes U.S. goods cheaper for foreigners and foreign goods more expensive for U.S. citizens. Therefore, U.S. citizens like Roberta may import fewer goods.

Which of the Following Could Be a Consequence of a Depreciation