Given the U

question 468

Multiple Choice

Given the U.S. price level P, the foreign country price level P*, and the nominal exchange rate E expressed in foreign currency per U.S. dollar, the real exchange rate RER is given by

• A) RER = E × (P/P*).
• B) RER = E × (P*/P).
• C) RER = (P/P*) / E.
• D) RER = P / (E/P*).

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