The average of the bilateral rate changes for a nation, weighted by the importance of the trading partner, is known as the:
a. real exchange rate.
b. nominal exchange rate.
c. effective exchange rate.
d. direct exchange rate.
Ans: c. effective exchange rate.
You might also like to view...
One potential weakness of the coordination failure model as an explanation of business cycles is that
A) evidence supporting intertemporal substitution as an important determinant of labor supply is weak. B) evidence supporting the existence of increasing returns at the aggregate level is weak. C) it fails to explain several of the key business cycle regularities. D) it requires that consumers not behave in a rational manner.
Which of the following helps explain why more people don't immigrate to rich countries?
A. It's difficult due to the immigration restrictions of rich countries. B. The language barrier is too great. C. Educational degrees are not recognized. D. The strain of leaving some family behind is too stressful.
Congressman Localstuff always votes for a balanced budget amendment to the U.S. Constitution. He also always votes for spending bills supported by the leadership of his political party. Is this rational?
Tax revenues
What will be an ideal response?