If the real exchange rate is greater than 1, then the
a. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would buy more then enough foreign currency to buy the same good overseas.
b. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas.
c. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would buy more then enough foreign currency to buy the same good overseas.
d. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas.
a
You might also like to view...
Suppose the annual growth rate of real GDP for the nation of Svengali is 5% and the growth rate of velocity is 0%. If the money supply growth rate decreases from 6% to 2%, what was the initial rate of inflation in Svengali?
A) -1%. B) 1%. C) 1.25%. D) 9%.
Given that India and Sri Lanka are trading partners, if Sri Lanka experiences a recession, the aggregate demand curve of India will shift to the right
a. True b. False Indicate whether the statement is true or false
Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect
a. the demand for honey to increase
b. the demand for honey to decrease
c. the quantity demanded of honey to decrease
d. the price of honey to decrease
e. the quantity demanded of honey to increase
A market system tends to create inequality.
Answer the following statement true (T) or false (F)