Multiple Choice
Suppose that in 2015 the nominal exchange rate was 9 Egyptian pounds per dollar, the price of a basket of goods in the U.S. was $600 and the price of the same basket of goods in Egypt was 6000 pounds. Suppose that in 2016 these values were 10 Egyptian pounds per dollar, $620, and 7200 pounds. From 2015 to 2016 U.S. real exchange rate
A) appreciated which by itself would make U.S. net exports fall.
B) appreciated which by itself would make U.S. net exports rise.
C) depreciated which by itself would make U.S. net exports fall.
D) depreciated which by itself would make U.S. net exports rise.
Correct Answer:
Verified
Correct Answer:
Verified
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