The Nominal Exchange Rate Is the

question 30

Multiple Choice

The nominal exchange rate is the

• A)nominal interest rate in one country divided by the nominal interest rate in the other country.
• B)the ratio of a foreign country's interest rate to the domestic interest rate.
• C)rate at which a person can trade the currency of one country for another.
• D)the real exchange rate minus the inflation rate.

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Definitions:

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a long period, accounting for adjustments in all factors of production.

Short-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the amount that producers are willing to supply, over a short period.

Output

The quantity of goods or services produced by a firm, industry, or economy in a given time period.

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the variable cost of producing each unit.