What's the difference between the nominal exchange rate and the real exchange rate?
What will be an ideal response?
The nominal exchange rate measures the value of one country's currency in terms of another country's currency. The real exchange rate measures the price of domestic goods in terms of foreign goods. Mathematically, the real exchange rate is equal to the nominal exchange rate times the ratio of the domestic price level to the foreign price level.
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Keynes and his followers believed that
A) the economy could not operate at any level of real Gross Domestic Product (GDP) less than full capacity. B) capitalism was one economic system that guaranteed full employment. C) wages and prices in the short run were flexible. D) there was no guarantee that a capitalist economy would reach a full employment equilibrium.
A merger between a firm manufacturing radios and a firm manufacturing paper products is a
A) conglomerate merger. B) diagonal merger. C) horizontal merger. D) vertical merger.