If the number of South Korean Won it takes to buy a U.S. dollar rises and the prices of U.S. goods rise more than the prices of South Korean goods. then the US real exchange rate
A)appreciates and so U.S. net exports fall.
B)appreciates and so U.S. net exports rise.
C)depreciates and so U.S. net exports fall.
D)depreciates and so U.S. net exports rise.

Question

Quizplus · Accepted Answer

The U.S. real exchange rate appreciates because it takes more Won to buy a dollar, and U.S. goods become relatively more expensive, leading to a fall in U.S. net exports.

If the Number of South Korean Won It Takes to Buy