One Reason That Real Exchange Rates Do NOT Equal ________ $\bar { a }$

question 55

Multiple Choice

One reason that real exchange rates do NOT equal ________ is because ________.

• A) zero; of perfect arbitrage among traded goods
• B) one; of the inclusion of nontraded goods in price levels
• C) zero; real interest rates are not equal across countries
• D) \(\bar { a }\) ; the output gap is never zero
• E) the nominal exchange rate; of equalization of prices across countries

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