If the Real Exchange Rate Rises 2%,domestic Inflation Is 3%,and

question 81

Multiple Choice

If the real exchange rate rises 2%,domestic inflation is 3%,and foreign inflation is 4%,what is the percent change in the nominal exchange rate?

• A)5%
• B)3%
• C)1%
• D)-1%

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Definitions:

Consumer Surplus

The variance between the sum consumers are ready and able to spend on a good or service and what they really pay.

Producer Surplus

The gap between the amount producers are prepared to accept for a product or service and the actual payment they get.

Maximum Sum

The largest possible aggregate or total achieved from combining specific elements or numbers.

Output

The amount of goods or services produced by a firm, industry, or economy within a given period, an indicator of productivity.