An economy brings in most of the factors of production needed to make the goods it exports. What effect would a depreciation of this economy’s rate of exchange have?
- Aprice of imported goods in the domestic currency: fall; price of exported goods in the domestic currency: fall
- Bprice of imported goods in the domestic currency: fall; price of exported goods in the domestic currency: rise
- Cprice of imported goods in the domestic currency: rise; price of exported goods in the domestic currency: fall
- Dprice of imported goods in the domestic currency: rise; price of exported goods in the domestic currency: rise