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Assume that the nominal exchange rate decreases by 4%. If prices (both domestic and foreign do not change), we know that Group of answer choices foreign goods are now relatively cheaper. foreign goods are now relatively more expensive. domestic goods are now relatively more expensive. both A and C

Respuesta :

Answer:

foreign goods are now relatively more expensive

Explanation:

Nominal exchange rate is the amount of domestic currency needed to purchase given units foreign currency.

If nominal exchange rate changes without a change of prices, it would make foreign relatively more expensive because more units of domestic goods would be needed to buy the same amount of foriegn goods.

I hope my answer helps you

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