An increase in the real exchange rate indicates that A) ...

[serike]

An increase in the real exchange rate indicates that
 
  A) domestic goods are now relatively cheaper.
  B) domestic goods are now relatively more expensive.
  C) foreign goods are now relatively cheaper.
  D) both B and C

Question 2

Suppose that increased international trade makes product markets more competitive in the U.S. Given this information, we would expect to observe which of the following?
 
  A) an upward shift in the WS curve
  B) a downward shift in the WS curve
  C) an upward shift in the PS curve
  D) a downward shift in the PS curve
  E) none of the above

[tkempin]

Answer to Question 1

D

Answer to Question 2

C