Assuming no change in the nominal exchange rate, how will a decrease in the price level in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)

A) The real exchange rate will rise.
B) The real exchange rate will be unaffected.
C) The real exchange rate will fall.
D) The impact on the real exchange rate cannot be predicted.

C

Economics

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