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Germany Has a Higher Rate of Inflation Than Japan

Question 24

Multiple Choice

Germany has a higher rate of inflation than Japan.The nominal exchange rate is constant.In this scenario,which of the following statement is true?


A) Germany experiences an increase in its real exchange rate.
B) Germany experiences a decrease in its real exchange rate.
C) Japan experiences an increase in its real exchange rate.
D) German goods are cheaper now.

Correct Answer:

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