If the U.S.real exchange rate appreciates relative to the euro,U.S.exports to Europe
A)and European exports to the U.S.both rise.
B)and European exports to the U.S.both fall.
C)rise, and European exports to the U.S.fall.
D)fall, and European exports to the U.S.rise.

Question

Quizplus · Accepted Answer

When the U.S. real exchange rate appreciates relative to the euro, U.S. goods become more expensive for Europeans, leading to a decrease in U.S. exports to Europe. Conversely, European goods become cheaper for Americans, leading to an increase in European exports to the U.S.

If the USReal Exchange Rate Appreciates Relative to the Euro,U