Suppose That the Real Exchange Rate Between the United States

question 252

Multiple Choice

Suppose that the real exchange rate between the United States and Zambia is defined in terms of baskets of goods.Other things the same,which of the following will increase the real exchange rate (that is increase the number of baskets of Zambian goods a basket of U.S.goods buys) ?

• A)a decrease in the number of Zambian Kwacha that can be purchased with a dollar
• B)a decrease in the price of U.S.baskets of goods
• C)a decrease in the price in Zambian Kwacha of Zambian goods
• D)None of the above is correct.

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