When Exchange Rates Are Defined as Foreign Currency Per Dollar

question 14

Multiple Choice

When exchange rates are defined as foreign currency per dollar and foreign goods per US goods, the ability to profit by purchasing wheat in the United States and selling it in China implies that the

• A)nominal exchange rate is less than 1.
• B)nominal exchange rate is greater than 1.
• C)real exchange rate is less than 1.
• D)real exchange rate is greater than 1.

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Definitions:

Benchmarking Partner

An entity against which a company measures its processes, practices, or performance for improvement.

Same Type Of Business

Companies or enterprises that operate in the same industry or sector, often offering similar products or services.

Balanced Scorecard

A strategic planning and management system that uses a broad range of financial and non-financial metrics to assess an organization's performance.

Bottom-Line Profit

The net income reported at the bottom line of the income statement, indicating the profit remaining after all expenses have been deducted from total revenues.