In the Long Run, the Nominal Exchange Rate

question 83

Multiple Choice

In the long run, the nominal exchange rate:

• A) is indeterminate.
• B) is equal to the ratio of the money supply in the two economies.
• C) is equal to the ratio of the price levels in the two economies.
• D) equals the real exchange rate.
• E) equals the nominal exchange rate in the short run.

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Definitions:

Inequality

A mathematical statement indicating that two expressions are not equal, using symbols such as >, <, ≥, or ≤.

Solution

The result of solving a problem or equation, providing a value or set of values that satisfy the conditions expressed.

Inequality

A mathematical statement that indicates one quantity is larger or smaller than another, not equal.

Solve

To find an answer or solution to a problem, equation, or puzzle.