Other things the same,if the real exchange rate appreciates,then net exports
A)increase and net capital outflow decreases.
B)decrease and net capital outflow increases.
C)and net capital outflow both increase.
D)and net capital outflow both decrease.

Question

Quizplus · Accepted Answer

When the real exchange rate appreciates, domestic goods become more expensive relative to foreign goods, leading to a decrease in net exports. Simultaneously, the higher value of the domestic currency makes foreign investments more attractive, reducing net capital outflow.

Other Things the Same,if the Real Exchange Rate Appreciates,then Net