Which of the following would an appreciation 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

An appreciation of the Canadian real exchange rate would make foreign goods relatively cheaper compared to domestic goods, therefore Canadian consumers would be induced to buy more foreign goods and fewer domestic goods.

Which of the Following Would an Appreciation of the Canadian