Germany Has a Higher Rate of Inflation Than Japan

question 24

Multiple Choice

Germany has a higher rate of inflation than Japan.The nominal exchange rate is constant.In this scenario,which of the following statement is true?

• A) Germany experiences an increase in its real exchange rate.
• B) Germany experiences a decrease in its real exchange rate.
• C) Japan experiences an increase in its real exchange rate.
• D) German goods are cheaper now.

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Definitions:

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