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:

Budgeted Production and Sales

An estimate of the amount of goods a company plans to produce and the sales it expects to achieve within a specific period, typically for planning and control purposes.

Unit Selling Price

The amount of money charged to a customer for a single unit of a product or service.

Budgeted Sales

Refers to the expected amount of sales revenue a company plans to achieve during a specified period, often used for planning and performance evaluation purposes.

Beginning Inventory

The value of all goods held by a company for sale at the start of an accounting period, before any new inventory has been added or any sales have been made.