In the Long Run, the Nominal Exchange Rate

question 130

Multiple Choice

In the long run, the nominal exchange rate

• A) is a monetary phenomenon, determined by the quantities of money in two countries.
• B) is not related to the real exchange rate, since the real exchange rate is the true value of currencies.
• C) will not change if prices in one country change, since prices are nominal variables.
• D) is fixed by world central banks, as indicated by the fixed exchange rate system.