If the Real Exchange Rate Is Less Than 1, Then

question 199

Multiple Choice

If the real exchange rate is less than 1, then the

• A) nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would buy more than enough foreign currency to buy the same good overseas.
• B) nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would not buy enough foregoing currency to buy the same good overseas.
• C) nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would buy more than enough foreign currency to buy the same good overseas.
• D) nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas.

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Definitions:

Lots

Parcels or portions of land, often used in the context of real estate transactions.

Good Faith Requirement

An obligation for parties to act honestly and not mislead or deceive each other in a contract or legal agreement.

Sales Contract

A legally binding agreement between a buyer and a seller detailing the terms of a sale of goods or services.

Pastel Colors

Refers to pale shades of colors, which have a high value and low to intermediate saturation, often used to evoke a soft, soothing, or delicate visual effect.