If the Real Exchange Rate Is High, Greater Than 1

question 6

Multiple Choice

If the real exchange rate is high, greater than 1,

• A) it is cheaper to buy goods domestically than abroad.
• B) foreign goods would be cheaper than domestic goods.
• C) the nominal exchange rate is depreciating.
• D) the nominal exchange rate is appreciating.
• E) the purchasing power of domestic income has diminished.

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Definitions:

Limited And Bundled Choices

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Paradox Of Voting

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Rent-Seeking Behavior

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