Assume That the Nominal Exchange Rate Decreases by 4

question 57

Multiple Choice

Assume that the nominal exchange rate decreases by 4%.If prices (both domestic and foreign do not change) ,we know that

• A)foreign goods are now relatively cheaper.
• B)foreign goods are now relatively more expensive.
• C)domestic goods are now relatively more expensive.
• D)both A and C

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Definitions:

Seaweed

Multicellular algae that grow in marine or freshwater environments, often used as food or fertilizer.

Sea Lettuce

A common name for Ulva, a genus of edible green algae that grows in salty waters around the world.

Ulva

A genus of green algae, commonly known as sea lettuce, found in marine and brackish water environments.

Nori

A type of edible seaweed often used in Japanese cuisine, especially for wrapping sushi.