Suppose Exchange Rates Are Defined as Foreign Currency Per Dollar

question 12

Multiple Choice

Suppose exchange rates are defined as foreign currency per dollar and foreign goods per U.S. goods. According to purchasing-power parity, if the price of a basket of goods in the United States rose from $1,500 to $2,000 and the price of the same basket of goods rose from 600 units of some other country's currency to 1,000 units of that country's currency, then the

• A)nominal exchange rate would appreciate.
• B)nominal exchange rate would depreciate.
• C)real exchange rate would appreciate.
• D)real exchange rate would depreciate.

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Definitions:

Complaint

The pleading in a civil case in which the plaintiff states his claim and requests relief.

Legal Privilege

A legal right that allows individuals to refuse to disclose information or allows certain communications to remain confidential.

Discovery

A pre-trial process in legal proceedings where both parties exchange information and evidence to prepare for trial.

Counterclaim

A legal claim brought by a defendant against a plaintiff in response to the original claim filed in a lawsuit.