Final answer:
A change in the exchange rate alters the prices of both exports and imports. The correct option is c.
Step-by-step explanation:
A change in the exchange rate for a country's currency alters the prices of both exports and imports.
When the exchange rate of a country's currency changes, it affects the competitiveness of its exports and imports. For example, if the currency depreciates (value decreases), the prices of the country's exports become cheaper, which increases the quantity demanded by foreign consumers.
On the other hand, the prices of imported goods become more expensive, reducing the quantity demanded by domestic consumers. As a result, changes in exchange rates impact both the prices of exports and imports, leading to shifts in trade balances and aggregate demand in the economy. The correct option is c.