When the Nominal Exchange Decreases from 40

question 98

Multiple Choice

When the nominal exchange decreases from 40.2 rupees per dollar to 40.1 rupees per dollar,the dollar has

• A) appreciated.
• B) depreciated.
• C) become overvalued.
• D) become undervalued.
• E) been devalued.

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Definitions:

Aggregate Income

The total amount of income earned by all individuals or entities within an economy.

World Economy

The global network of economic activities, trade, and production that transcends national borders, involving various economies of the world.

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The part of the economy that is run by individuals and companies for profit and is not state controlled.

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Entities or individuals that provide the necessary inputs (like labor, raw materials, and capital) for the production of goods and services.