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

Question

Quizplus · Accepted Answer

When the U.S. real exchange rate appreciates, U.S. goods become more expensive relative to foreign goods, leading to a decrease in net exports. Simultaneously, the appreciation makes foreign investments more attractive, leading to a decrease in U.S. net capital outflow.

Other Things the Same,if the U