A Revaluation of the Exchange Rate Is a Policy Action

question 9

Multiple Choice

A revaluation of the exchange rate is a policy action that

• A) increases the real exchange rate.
• B) decreases the real exchange rate.
• C) increases the nominal exchange rate.
• D) decreases the nominal exchange rate.
• E) fixes the nominal exchange rate.

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Definitions:

Tariff

A tax imposed by a government on imported or exported goods.

Protected

Shielded from harm, damage, or unwanted access, often through legal or regulatory means.

Domestic Price

The price of goods or services within a country's own market, as opposed to international or export prices.

Imported Shoes

Footwear that is produced in one country and then brought into another country for sale, often reflecting differences in fashion, quality, or price.