What Is the Real Exchange Rate Equal To

question 72

Multiple Choice

What is the real exchange rate equal to?

• A) the relative price of domestic and foreign currency
• B) the relative price of domestic and foreign goods
• C) the ratio between the domestic and foreign interest rates
• D) the nominal exchange rate minus the inflation rate

---

Definitions:

Piaget's Theory

A theory of cognitive development that describes how children construct a mental model of the world through stages of cognitive growth.

Objective Morality

The belief in moral truths that are universal and independent of individual opinions or feelings.

Autonomous Morality

The stage of moral development where individuals recognize that rules and laws are created for the good of the collective and can be changed through consensus.

Preconventional Stage

The first level in Kohlberg's theory of moral development, characterized by an individual's response to moral issues based on consequences to oneself.