An Index That Reflects the Average of Real Exchange Rates

question 104

Multiple Choice

An index that reflects the average of real exchange rates of the U.S. and its major trading partners is called:

• A) a multinational real exchange rate.
• B) a multilateral exchange rate.
• C) an average nominal exchange rate.
• D) none of the above

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Definitions:

GNP

Gross National Product; the total value of goods produced and services provided by a country during one year, including net income from abroad.

Net Factor Payments

The difference between the payments made to factors of production from abroad and the payments made to foreign factors of production domestically.

GDP

Gross Domestic Product, the total value of all goods and services produced over a specific time period within a country's borders.

GNP

Gross National Product, the total value of all goods and services produced by the residents of a country within a specific time period, including income earned abroad.