The Price of the Average Domestic Good or Service Relative

question 4

Multiple Choice

The price of the average domestic good or service relative to the price of the average foreign good or service, when prices are expressed in terms of a common currency is called the ________ exchange rate.

• A)flexible
• B)fixed
• C)real
• D)nominal

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Definitions:

Common Shares

A type of equity ownership in a corporation, where holders have voting rights and potential dividends, but come after preferred shareholders in bankruptcy or liquidation.

FIFO

First-In, First-Out, an accounting method for valuing the cost of goods sold that assumes the first items placed in inventory are sold first.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced or acquired items are sold or used first.

Inflation

The velocity at which the aggregate cost of goods and services ascends, thereby reducing the efficacy of purchasing power.