The exchange rate £/$ is an example of a:
a. Real, effective exchange rate.
b. Real, bilateral exchange rate.
c. Nominal, effective exchange rate.
d. Nominal, bilateral exchange rate.
.D
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Which of the following is one of the most important benefits of money in an economy?
a. Money allows for the exchange of goods and services. b. Money allows for the accumulation of wealth. c. Money makes exchange easier, leading to more specialization and higher productivity. d. Money encourages people to produce all of their own goods (self-sufficiency) and therefore increases economic stability.
The theory of bounded rationality is consistent with which of the following?
A. It is irrational to follow principles such as "follow the leader." B. It always pays to be irrational. C. Our rationality depends on rules of thumb such as "you get what you pay for." D. None of our decisions are rational.