If the Canadian dollar becomes stronger in international foreign exchange markets,imported goods become cheaper.One result of this is that
A)net exports decrease.
B)net exports increase.
C)domestic employment rises.
D)real GDP increases.

Question

Quizplus · Accepted Answer

When the Canadian dollar strengthens, it means that it takes fewer Canadian dollars to buy goods from other countries, making imported goods cheaper. As a result, consumers and businesses are likely to increase their purchases of imported goods rather than buying domestically produced goods, leading to a decrease in net exports. Net exports are calculated as the value of a country's exports minus the value of its imports. When imports increase without a corresponding increase in exports, net exports decrease.

If the Canadian Dollar Becomes Stronger in International Foreign Exchange