Which of the Following Would Cause the Nominal Exchange Rate

question 78

Multiple Choice

Which of the following would cause the nominal exchange rate to appreciate?

• A)The real exchange rate depreciates.
• B)The domestic inflation rate decreases.
• C)The domestic inflation rate increases.
• D)The government budget deficit decreases.

---

Definitions:

Motives

Internal processes that energize, direct, and sustain behavior towards fulfilling a need or achieving a goal.

Needs

Something that is necessary to survive or thrive.

Need

A requirement essential for an organism's survival, growth, or well-being.

Physiological Needs

Basic physical requirements including air, water, food, shelter, and sleep, necessary for human survival.