An economy brings in most of the factors of production that are used to produce its exported goods. What impact would a depreciation in this economy’s exchange rate 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