Because the Real Exchange Is Composed of Three Variables That

question 25

Multiple Choice

Because the real exchange is composed of three variables that can all move simultaneously,many combinations of changes lead to a real appreciation of the pound (in this case) .Which one of the following options is NOT a basic movement?

• A) a decrease in the pound prices of U.S. goods, not holding the dollar prices constant
• B) a decrease in the dollar prices of U.S. goods, holding the exchange rate and the pound prices of goods constant
• C) an increase in the pound prices of goods, holding the exchange rate and the dollar prices of goods constant
• D) an increase in the nominal exchange rate ($/?), holding the dollar prices and pound prices of goods constant

---

Definitions:

Markov Analysis

Forecast of a firm’s future human resource supplies, using transitional probability matrices reflecting historical or expected movements of employees across jobs.

What If

Refers to a method of questioning or analysis used to explore possibilities, predict outcomes, or understand scenarios hypothetically.

Possible Future Scenarios

Hypothetical situations or outcomes that may occur in the future, used for planning and strategizing.

Expert Forecasting

The technique of making predictions about future events or trends based on the knowledge and expertise of specialists in a particular field.