Question

g A depreciation of the U.S. real exchange rate induces U.S. 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.

Answer 1

Answer:

more domestic goods and fewer foreign goods.

Explanation:

Real exchange rate is the rate at which the goods and services of a domestic country is exchanged for the goods and services of a foreign country.

If there's deprecation, it means that foreign goods becomes more expensive relative to domestic goods. As a result, demand for foreign goods would fall and demand for domestic goods would increase.

I hope my answer helps you