Choose the Correct Statements About the Real Exchange Rate

question 69

Multiple Choice

Choose the correct statements about the real exchange rate. 1. The real exchange rate is a measure of how much of one money exchanges for a unit of another money.
2. The real exchange rate is the value of the Canadian dollar expressed in units of foreign currency per Canadian dollar.
3. The real exchange rate is the relative price of Canadian-produced goods and services to foreign-produced goods and services.
4. The real exchange rate is a measure of the quantity of the real GDP of other countries that we get for a unit of Canadian real GDP.

• A)Statements 1 and 2 are correct.
• B)Statements 2 and 4 are correct.
• C)Statements 1 and 3 are correct.
• D)Statements 3 and 4 are correct.
• E)Statements 2 and 3 are correct.

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Definitions:

Separate Legal Entities

Organizations that are legally independent from their owners, with their own rights and obligations.

Acquired Businesses

Businesses that have been purchased and taken over by another company. Acquisitions can be a strategy for growth, diversification, or gaining competitive advantage.

Junk Bonds

High-yield, high-risk securities issued by companies or municipalities with lower credit ratings, offering investors potentially higher returns in exchange for the increased risk.

Risky Companies

Businesses that operate in highly volatile sectors or have financial uncertainties making their investments considered higher risk.