If One US Dollar Is Traded on the Foreign Exchange Market for Market

question 82

Multiple Choice

If one U.S. dollar is traded on the foreign exchange market for about 49.0 Indian rupees,then one Indian rupee can purchase about ________ U.S. dollars.

• A)0.02
• B)1.20
• C)7.00
• D)49.0

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Definitions:

Nominal GDP

The gross domestic product measured at current market prices, not adjusting for inflation, reflecting the value of all goods and services produced.

Real GDP

The total value of all goods and services produced by an economy over a specific time period, adjusted for inflation.

Price Level

The mean of present prices for all goods and services produced within an economy, typically gauged by a price index.

Exchange Rate

the value of one currency for the purpose of conversion to another, showing how much of one currency can be exchanged for a unit of another currency.