Other things the same, when the real exchange rate of the dollar appreciates, U.S. goods become more desirable to U.S. residents, but less desirable to foreign residents.

Question

Quizplus · Accepted Answer

When the real exchange rate of the dollar appreciates, U.S. goods become more expensive to foreign residents, making them less desirable abroad, but this does not necessarily make them more desirable to U.S. residents; it just makes foreign goods relatively cheaper for U.S. residents.

Other Things the Same, When the Real Exchange Rate of the Dollar