What's the difference between the nominal exchange rate and the real exchange rate?
What will be an ideal response?
The nominal exchange rate measures the value of one country's currency in terms of another country's currency. The real exchange rate measures the price of domestic goods in terms of foreign goods. Mathematically, the real exchange rate is equal to the nominal exchange rate times the ratio of the domestic price level to the foreign price level.
You might also like to view...
If your income stays the same and the price level increases, you will buy fewer goods and services due to the
A) interest rate effect. B) real-balance effect. C) open economy effect. D) aggregate balances effect.
In the figure above, the richest 40 percent of households receive ________ of total income
A) 70 percent B) 30 percent C) 60 percent D) 80 percent
Refer to Figure 13-3. What is the marginal revenue of the sixth unit of output?
A) $4 B) $5 C) $9 D) $54
The t-test is used to test hypotheses concerning the individual regression coefficients
Indicate whether the statement is true or false