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:

Fair-Mindedness

The quality of being impartial, open to different perspectives, and able to recognize one's own biases.

Reasoning

The process of thinking about something in a logical way in order to form a conclusion or judgment.

Critical Thinking

The objective analysis and evaluation of an issue to form a judgment.

Analytical

Relating to or using analysis or logical reasoning to address a problem or dissect a concept.