Suppose That the Nominal Exchange Rate Is

Multiple Choice

Suppose that the nominal exchange rate is .80 euro per dollar,that the price of a basket of goods in the U.S.is $500 and the price of a basket of goods in Germany is 400 Euro.Suppose that these values change to .90 euro per dollar,$600,and 600 euro.Then the real exchange rate would

A) appreciate which by itself would make U.S.net exports fall.
B) appreciate which by itself would make U.S.net exports rise.
C) depreciate which by itself would make U.S.net exports fall.
D) depreciate which by itself would make U.S.net exports rise.