If the Nominal Exchange Rate Does Not Change,but U

question 78

Multiple Choice

If the nominal exchange rate does not change,but U.S.prices rise,the real exchange rate has ________,and U.S.imports are likely to ________.

• A)increased; rise
• B)increased; fall
• C)decreased; rise
• D)decreased; fall

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Definitions:

Gross Domestic Product

Gross Domestic Product (GDP) measures the total economic output of a country, representing the value of all goods and services produced over a specific time period.

Economic Force

A factor that can influence the economy, such as inflation, unemployment rates, or technological advancements.

Consumer Ethnocentrism

The belief held by consumers that buying domestic products is morally right and superior to purchasing foreign products.

International Protectionism

This refers to the use of barriers and regulations by countries to protect their domestic industries from foreign competition.