Concerning the Exchange Rate Index of the U

question 142

Multiple Choice

Concerning the exchange rate index of the U.S.dollar, suppose that the dollar's real exchange rate index falls from 125 to 110.This means that

• A) U.S. goods are less competitive on foreign markets.
• B) U.S. goods are more competitive on foreign markets.
• C) the dollar has appreciated against the currencies of its major trading partners.
• D) U.S. price levels are identical to its trading partners.