If a Nation Trades with Another Nation in a Foreign

question 87

Multiple Choice

If a nation trades with another nation in a foreign currency (such as some commodities sold that are priced in U.S. dollars) , then, when nominal exchange rates change, the real effective exchange rate will:

• A) change by more.
• B) change by less.
• C) change in exactly the same proportion.
• D) not change at all.

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