Suppose That the U

question 55

Multiple Choice

Suppose that the U.S. dollar depreciates nominally against the Mexican peso by 5%. The price level in the United States increases by 7%, but Mexico's price level does not change. From this we can conclude that:

• A) U.S. goods became cheaper relative to Mexican goods.
• B) U.S. goods became more expensive relative to Mexican goods.
• C) there was no change in the real exchange rate.
• D) the real exchange rate for the United States depreciated.

---

Definitions:

Randomly Selected

A method of selection where each item or person in a population has an equal chance of being chosen, ensuring the sample's representativeness of the population.

United States

A country located primarily in North America, consisting of 50 states, a federal district, five major territories, and various minor islands.

Binomial Formula

A mathematical formula used to determine the number of successes in a fixed number of trials in a binomial experiment, given the probability of success in each trial.

Independent

Refers to a variable in an experiment or study that is purposely manipulated or changed to observe its effect on other variables.