If the real exchange rate rises 4%, domestic inflation is 2%, and foreign inflation is 0%, what is the percent change in the nominal exchange rate?
A) 6%
B) 4%
C) 2%
D) 0%
C
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A prolonged recession in Europe should decrease the
A. supply of U.S. dollars. B. demand for U.S. dollars. C. supply of U.S. goods and services. D. demand by Americans for euros.
Economic restructuring that takes place as a result of opening to trade with other countries
A) contradicts the idea of gains from trade. B) causes some trading activity to be zero sum. C) worsens the nation's allocation of resources. D) improves the nation's allocation of resources. E) is a highly unlikely event.
The soft drink industry can best be described as:
A) an oligopoly. B) a monopoly. C) perfectly competitive. D) monopolistically competitive.
A fully funded plan requires
A. you to pay for your dinner as you go to the table to eat. B. current working citizens to pay for current retired citizens. C. no taxes since current workers pay for current retirees. D. retirees to be paid from accounts that have accumulated with interest over their working lives.