Ceteris paribus, if the U.S. dollar depreciated in relation to the Canadian dollar, which of the following would be true?

Question

Quizplus · Accepted Answer

If the U.S. dollar depreciates in relation to the Canadian dollar, it means that it will take more U.S. dollars to buy one Canadian dollar. This makes U.S. goods relatively cheaper for Canadian consumers, as they will need to spend fewer Canadian dollars to purchase the same amount of U.S. goods. On the other hand, Canadian goods would become relatively more expensive for U.S. consumers. The option C is not relevant as the question does not mention European consumers. Therefore, the correct answer is A.

Ceteris Paribus, If the U