The Price of the Average Domestic Good or Service Relative

question 4

Multiple Choice

The price of the average domestic good or service relative to the price of the average foreign good or service, when prices are expressed in terms of a common currency is called the ________ exchange rate.

• A)flexible
• B)fixed
• C)real
• D)nominal

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Definitions:

Hang Seng

The Hang Seng Index is a freefloat-adjusted market-capitalization-weighted stock-market index in Hong Kong, used to record and monitor daily changes of the largest companies of the market.

Repurchase Agreements

Short-term loans where securities are sold with an agreement to repurchase them at a higher price at a future date, often used for raising short-term capital.

T-bills

Short-term U.S. government debt obligations known for their safety and liquidity, maturing in one year or less.

Money Market Mutual Funds

Investment funds that invest in short-term debt securities, providing investors with high liquidity and a relatively safe investment.