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    Principles of Macroeconomics Study Set 8
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    Exam 18: Open Economy Macroeconomics Basic Concepts: The Prices for International Transactions Real and Nominal Exchange Rates
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    If the Nominal Exchange Rate E Is Foreign Currency Per
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If the Nominal Exchange Rate E Is Foreign Currency Per

Question 26

Question 26

Multiple Choice

If the nominal exchange rate e is foreign currency per dollar,the domestic price is P,and the foreign price is P*,then the real exchange rate is defined as


A) P*/(Pe) .
B) P/(P*e) .
C) e(P*/P) .
D) e(P/P*) ,

Correct Answer:

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