Which Statement About Real Exchange Rates Is Not True

question 1

Multiple Choice

Which statement about real exchange rates is not true?

• A) Real exchange rate changes are caused by changes in nominal exchange rates.
• B) Real exchange rates measure deviations from PPP.
• C) Real exchange rates are always unity.
• D) Real exchange rates affect the international competitive positions of countries.

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Definitions:

Cosmetics Department

A specialized division or section within a store or company focused on the sale and promotion of beauty products.

Period Costs

Expenses that are not directly tied to the production process and are expensed in the period they are incurred.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and regulators.

Units Sold

The total quantity of a product that has been sold during a specific period.