Suppose That the Real Exchange Rate Between the United States

question 261

Multiple Choice

Suppose that the real exchange rate between the United States and Vietnam is defined in terms of baskets of goods. Other things the same, which of the following will increase the real exchange rate (that is increase the number of baskets of Vietnamese goods a basket of U.S. goods buys) ?

• A)an increase in the quantity of Vietnamese currency that can be purchased with a dollar
• B)an increase in the price of U.S. baskets of goods
• C)a decrease in the price in Vietnamese currency of Vietnamese goods
• D)All of the above are correct.

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Definitions:

Internal Validity

The extent to which the design and conduct of a study allow for accurate attribution of outcomes to the intervention or treatment, rather than to confounding variables.

Nonequivalent Control Group Design

A quasi-experimental research design where the experimental group and control group may not be strictly comparable at the outset of the experiment, lacking random assignment.

Selection Differences

Differences in the type of subjects who make up each group in an experimental design; this situation occurs whenparticipants elect which groupthey are to be assigned to.

Independent Variable

In experimental research, the factor that is altered by the scientist to observe how it affects a dependent variable.