If the Real Exchange Rate Rises 4%,domestic Inflation Is 2%,and

question 9

Multiple Choice

If the real exchange rate rises 4%,domestic inflation is 2%,and foreign inflation is 0%,what is the percent change in the nominal exchange rate?

• A)6%
• B)4%
• C)2%
• D)0%

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Definitions:

Potential Obligation

This term refers to a possible future liability that might arise as a result of past events or transactions, dependent on certain occurrences.