A depreciation of the U.S. real exchange rate induces U.S. consumers to buy
A)fewer domestic goods and fewer foreign goods.
B)more domestic goods and fewer foreign goods.
C)fewer domestic goods and more foreign goods.
D)more domestic goods and more foreign goods.

Question

Quizplus · Accepted Answer

A depreciation of the U.S. real exchange rate makes foreign goods more expensive relative to domestic goods, leading U.S. consumers to buy more domestic goods and fewer foreign goods.

A Depreciation of the U