An Increase in the Real Exchange Rate Indicates That

question 70

Multiple Choice

An increase in the real exchange rate indicates that

• A)domestic goods are now relatively cheaper.
• B)domestic goods are now relatively more expensive.
• C)foreign goods are now relatively cheaper.
• D)both B and C

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Definitions:

Selling Price

The amount of money for which a product or service is sold to the consumer.

Overhead Expenses

Ongoing costs involved in operating a business that are not directly tied to providing goods or services, such as rent, utilities, and administration costs.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Selling Price

The selling price is the amount a buyer pays to acquire a product or service from a seller.