According to Purchasing-Power Parity,if the Price of a Basket of Goods

question 36

Multiple Choice

According to purchasing-power parity,if the price of a basket of goods in the U.S.rose from $2,000 to $2,104 and the price of the same basket of goods rose from 800 units to 832 units of some other country's currency,then the

• A)nominal exchange rate would appreciate.
• B)nominal exchange rate would depreciate.
• C)real exchange rate would appreciate.
• D)real exchange rate would depreciate.

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