Suppose That the Real Exchange Rate Between the United States

question 238

Multiple Choice

Suppose that the real exchange rate between the United States and Kenya is defined in terms of baskets of goods. Other things the same, which of the following will increase the real exchange rate (that is increase the number of baskets of Kenyan goods a basket of U.S. goods buys) ?

• A)an increase in the number of Kenyan shillings that can be purchased with a dollar
• B)an increase in the price of U.S. baskets of goods
• C)a decrease in the price in Kenyan shillings of Kenyan goods
• D)All of the above are correct.

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Definitions:

Shays' Rebellion

An armed uprising in 1786-1787 in Massachusetts by American farmers against state and local enforcement of tax collections and judgments for debt, highlighting the weaknesses of the Articles of Confederation.

Articles of Confederation

The first constitution of the 13 American states, adopted in 1781 and replaced in 1789 by the United States Constitution.

Articles of Confederation

The original constitution of the United States, ratified in 1781, which was replaced by the U.S. Constitution in 1789 due to its inability to provide a strong central government.

Supremacy Clause

A clause in the United States Constitution stating that federal law takes precedence over state laws and constitutions when they conflict.