There is an inverse relationship between the real exchange rate
and net exports of a country.
When the real exchange rate appreciates, the domestic goods
become very expensive when compared to the foreign goods.
This increases the demand for foreign goods and decreases the
demand for domestic goods which leads to an increase in imports, a
fall in exports and net-exports.
When exports decline, imports rise and the net-exports fall,
the demand for that country's dollar also fall.
This show's that there is an inverse relationship between the
real exchange rate and the net exports, which is represented by a
downward sloping demand curve.