Which of the following is consistent with a depreciation of the dollar?
A)Canadian goods become less expensive relative to foreign goods, which makes exports rise and imports fall.
B)Canadian goods become less expensive relative to foreign goods, which makes exports fall and imports rise.
C)Canadian goods become more expensive relative to foreign goods, which makes exports rise and imports fall.
D)Canadian goods become more expensive relative to foreign goods, which makes exports fall and imports rise.

Question

Quizplus · Accepted Answer

A depreciation of the dollar means that the Canadian dollar is worth less relative to other currencies. This makes Canadian goods less expensive relative to foreign goods, which makes exports rise and imports fall.

Which of the Following Is Consistent with a Depreciation of the Dollar