Assuming No Change in the Nominal Exchange Rate,how Will a Higher

question 182

Multiple Choice

Assuming no change in the nominal exchange rate,how will a higher rate of inflation in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)

• A)The real exchange rate will rise.
• B)The real exchange rate will fall.
• C)The real exchange rate will be unaffected.
• D)The impact on the real exchange rate cannot be predicted.

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Definitions:

Obedience

The act of following orders or complying with instructions, often from a figure of authority, reflecting the degree of control or influence exerted over individuals or groups.

Amplification

The process of increasing the magnitude or intensity of something, often used in the context of sound, signals, or even ideas.

Condoning

Condoning refers to the act of overlooking, forgiving, or disregarding an offense without criticism or punishment.

Verbalize

To express thoughts, feelings, or information in spoken words or articulate speech.