The Percentage Change in the Nominal Exchange Rate Equals the Percentage

question 105

Multiple Choice

The percentage change in the nominal exchange rate equals the percentage change in the real exchange rate plus the:

• A) foreign inflation rate minus the domestic inflation rate.
• B) domestic inflation rate minus the foreign inflation rate.
• C) foreign exchange rate minus the domestic exchange rate.
• D) domestic interest rate minus the foreign interest rate.

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Definitions:

Talleyrand

Charles Maurice de Talleyrand-Périgord was a leading French diplomat who played a key role in negotiations during and after the French Revolution and the Napoleonic Wars.

Louisiana Purchase

The acquisition of the Louisiana territory by the United States from France in 1803, doubling the size of the U.S. at the time.

$15 Million

Refers to a specific financial amount, which, in historical contexts, might be associated with significant purchases or costs, such as the Louisiana Purchase.

North Africa

North Africa is a region on the African continent comprising countries along the Mediterranean coast, including Egypt, Libya, Tunisia, Algeria, and Morocco.