What happens if the Brazilian real appreciates relative to the U.S. dollar?
A) Brazilians will buy fewer U.S. goods, which generates an increase in the quantity supplied of dollars.
B) The quantity demanded of reals increases as U.S. residents want to buy more Brazilian products.
C) The quantity of reals supplied increases because the lower price (in reals) for U.S. goods induces Brazilians to buy more U.S. products.
D) The U.S. Federal Reserve Bank increases the supply of dollars to the world economy.
Answer: C
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