If the real exchange rate is high, foreign goods:
A) and domestic goods are both relatively expensive.
B) and domestic goods are both relatively cheap.
C) are relatively expensive and domestic goods are relatively cheap.
D) are relatively cheap and domestic goods are relatively expensive.

Question

Quizplus · Accepted Answer

A high real exchange rate means foreign goods are cheaper compared to domestic goods, making domestic goods relatively expensive.

If the Real Exchange Rate Is High, Foreign Goods