According to Purchasing-Power Parity,if the Price of a Basket of Goods

question 30

Multiple Choice

According to purchasing-power parity,if the price of a basket of goods in the U.S.rose from $1,500 to $2,000 and the price of the same basket of goods rose from 600 units of some other country's currency to 1,000 units of that country's currency,then the

• A)nominal exchange rate would appreciate.
• B)nominal exchange rate would depreciate.
• C)real exchange rate would appreciate.
• D)real exchange rate would depreciate.

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Definitions:

Autonomic Nervous System

Nervous system composed of nerve fibers that send impulses from the central nervous system to smooth muscle, cardiac muscle, and glands.

Enteric Nervous System

A subdivision of the peripheral nervous system that directly controls the gastrointestinal system.

Digestive Tract

The passage leading from the mouth to the anus through which food passes as it is digested.

Brain

The organ located in the skull, responsible for coordinating sensation, intellectual and nervous activity.