Which of the following would a depreciation of the Canadian real exchange rate induce Canadian 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 Canadian real exchange rate makes foreign goods more expensive and domestic goods cheaper, leading Canadian consumers to buy more domestic goods and fewer foreign goods.

Which of the Following Would a Depreciation of the Canadian