If the Nominal Exchange Rate in Dollars Per Pound Rises

question 34

Multiple Choice

If the nominal exchange rate in dollars per pound rises by 5%,the U.S.inflation is 2%,and the U.K.inflation is 0%,what is the percent change in the real exchange rate?

• A) 7%
• B) 5%
• C) 3%
• D) 2%

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Definitions:

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