When a Country's Real Exchange Rate Appreciates

question 97

Multiple Choice

When a country's real exchange rate appreciates,

• A)its nominal exchange rate must also have appreciated.
• B)its nominal exchange rate must have depreciated.
• C)it can trade its goods for fewer units of foreign goods.
• D)it can trade its goods for more units of foreign goods.

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Definitions:

Share Rights Plans

Strategic measures employed by companies to ward off hostile takeovers by diluting the value of shares held by potential acquirers.

Golden Parachute

A large financial compensation package guaranteed to a company executive in the event of a forced departure or takeover.

Hostile Takeover

An acquisition attempt by a company or individual that is strongly opposed by the target company's management and board of directors.

Equity Carve-out

A corporate strategy where a company sells a portion of the equity of a wholly owned subsidiary or division through an initial public offering.