Other Things the Same,an Increase in the Foreign Price Level

question 53

Multiple Choice

Other things the same,an increase in the foreign price level

• A)reduces the real exchange rate.This reduction could be offset by a decrease in the domestic price level.
• B)reduces the real exchange rate.This reduction could be offset by an increase in the domestic price level.
• C)increases the real exchange rate.This increase could be offset by a decrease in the domestic price level.
• D)increases the real exchange rate.This increase could be offset by an increase in the domestic price level.

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