The Real Exchange Rate Is

question 177

Multiple Choice

The real exchange rate is

• A) the nominal exchange rate multiplied by the ratio of the foreign price level to the U.S. price level.
• B) the money price of foreign produced goods relative to the money price of U.S. produced goods.
• C) the relative price of U.S. produced goods to foreign produced goods.
• D) a measure of how much currency exchanges for a unit of another currency.

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Definitions:

Fair Value Adjustment

An accounting process to adjust the book value of an asset or liability to its fair value.

Unrealized Gain

The unrealized gain from an investment that hasn't been converted into cash.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without controlling those policies.

Cash Dividends

Payments made by a corporation to its shareholders out of the company's current or retained earnings, usually in the form of cash.