If the price levels in the U.S and in Canada are unchanged,but the nominal exchange rate (Canadian dollars per U.S.dollar)rises,then
A)the U.S.dollar appreciates and so U.S.net exports rise.
B)the U.S.dollar appreciates and so U.S.net exports fall.
C)the U.S.dollar depreciates and so U.S.net exports rise.
D)the U.S.dollar depreciates and so U.S.net exports fall.

Question

If the price levels in the U.S and in Canada are unchanged,but the nominal exchange rate (Canadian dollars per U.S.dollar)rises,then
A)​the U.S.dollar appreciates and so U.S.net exports rise.
B)the U.S.dollar appreciates and so U.S.net exports fall.
C)the U.S.dollar depreciates and so U.S.net exports rise.
D)the U.S.dollar depreciates and so U.S.net exports fall.

Quizplus · Accepted Answer

When the nominal exchange rate rises, the U.S. dollar appreciates, making U.S. goods more expensive for Canadians, leading to a decrease in U.S. net exports.

If the Price Levels in the U