Suppose That the Real Exchange Rate Between the United States

question 115

Multiple Choice

Suppose that the real exchange rate between the United States and Kenya is defined in terms of baskets of goods. Other things the same, which of the following will increase the real exchange rate?

• A)a decrease in the quantity of Kenyan currency that can be purchased with a dollar
• B)a decrease in the price of U.S. baskets of goods
• C)a decrease in the price in Kenyan currency of Kenyan goods.
• D)None of the above is correct.

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Definitions:

Anxiety

Anxiety is a psychological state characterized by feelings of tension, worried thoughts, and physical changes like increased blood pressure, stemming from anticipation of future concerns.

Xanax

A prescription medication, generically known as alprazolam, used primarily for treating anxiety and panic disorders by acting on the brain and nerves to produce a calming effect.

Bilateral Anterior Cingulotomy

a neurosurgical procedure involving selective destruction of areas in the anterior cingulate cortex to relieve symptoms of mental disorders resistant to other treatments.

Major Depression

A mental disorder characterized by a persistent and severe low mood that is accompanied by low self-esteem and by a loss of interest or pleasure in normally enjoyable activities.