Which of the Following,all Else Fixed,will Cause the Real Exchange

question 42

Multiple Choice

Which of the following,all else fixed,will cause the real exchange rate to increase?

• A)a nominal depreciation
• B)a reduction in the foreign price level
• C)a reduction in the domestic price level
• D)all of the above
• E) none of the above

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Definitions:

Situational Analysis

The process of identifying internal and external factors affecting a business’s performance, used to inform strategy development.

Competing Products

Goods or services that are offered in the same market by different companies and serve as alternatives to each other.

Organic Foods Market

A sector of the food industry that deals with products produced via farming practices which aim to promote ecological balance and conserve biodiversity, avoiding most synthetic pesticides and fertilizers.

Market Segment

A distinct group of potential consumers who share similar needs, desires, and characteristics, targeted by businesses for marketing campaigns.