The figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted.The consumption effect of the export subsidy is shown by area(s)

If the U.S. dollar appreciates in the foreign exchange market,

a. American goods will become more expensive for foreign buyers and foreign goods will be cheaper for Americans. b. American goods will become less expensive for foreign buyers and foreign goods will be more expensive for Americans. c. American goods will become more expensive for foreign buyers and foreign goods will be more expensive for Americans. d. American goods will become cheaper for foreign buyers and foreign goods will be cheaper for Americans. e. neither the price of U.S. exports nor the price of U.S. imports will change.

The more flexible prices are, the

A) greater demand shifts have to be to bring about a new equilibrium. B) larger the shifts in supply will be after a change in demand. C) greater the reliance by sellers to change the nominal price. D) more quickly a shock to the economy can be absorbed.