For Most Currencies,the Nominal Bilateral Exchange Rate Is Defined as

question 40

Multiple Choice

For most currencies,the nominal bilateral exchange rate is defined as

• A) the amount of domestic currency needed to buy one dollar
• B) the amount of domestic currency needed to buy 1 unit of foreign currency
• C) the amount of foreign currency for which 1 unit of domestic currency can be sold
• D) the domestic currency price of the pound sterling
• E) the quantity of gold that can be purchased for one unit of domestic currency

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Definitions:

P = 4 + 3Q

A linear equation representing a direct relationship between price (P) and quantity (Q), where 4 is the fixed component, and 3 indicates the change in price per unit change in quantity.

Consumer Substitute

A product or service that consumers can choose as an alternative to another, similar product.

Supply Of Wheat

The quantity of wheat available in the market from producers at various price levels.

Price Of Wheat

The current market value at which wheat per unit (such as a bushel) can be bought or sold.