Suppose That the Real Exchange Rate Between Canada and Kenya

question 49

Multiple Choice

Suppose that the real exchange rate between Canada and Kenya is defined in terms of baskets of goods. Which of the following will increase the real exchange rate (that is, increase the number of baskets of Kenyan goods a basket of Canadian goods buys) ?

• A)an increase in the number of Kenyan shillings that can be purchased with a dollar
• B)an increase in the price in Canadian dollars of Kenyan goods
• C)an increase in the price in Kenyan shillings of Kenyan goods
• D)a decrease in the number of Kenyan shillings that can be purchased with a dollar

---

Definitions:

Monitoring System

A tool or set of tools designed to track performance, activities, or conditions for the purpose of detecting changes or managing control.

Factory Inspections

Reviews conducted in manufacturing facilities to ensure compliance with safety standards, labor laws, and quality control measures.

Supplier Factories

Manufacturing facilities that produce goods or components for other companies, under contract or agreement.

Self-Serving Bias

The common human tendency to attribute positive events to one's own character but attribute negative events to external factors.