In the Open-Economy Macroeconomic Model, the Price That Balances Supply

question 45

Multiple Choice

In the open-economy macroeconomic model, the price that balances supply and demand in the market for foreign-currency exchange is the

• A)nominal exchange rate.
• B)nominal interest rate.
• C)real exchange rate.
• D)real interest rate.

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Definitions:

Brokerage Commissions

Fees charged by a broker for executing transactions or providing specialized financial services.

British Securities

Financial instruments issued in the United Kingdom, including stocks, bonds, and other investment vehicles.

Total Return

The overall financial gain or loss on an investment, including both capital appreciation/depreciation and income like dividends and interest over a given time period.

U.S. Dollars

The official currency of the United States, widely used as a global reserve currency and standard for international transactions.