In a Small Open Economy, When Foreign Governments Reduce National

Multiple Choice

In a small open economy, when foreign governments reduce national saving in their countries, the equilibrium real exchange rate (measured in units of the home currency divided by units of foreign currency) :

A) rises, and home country net exports fall.
B) rises, and home country net exports rise.
C) falls, and home country net exports fall.
D) falls, and home country net exports rise.