Multiple Choice
The final market price of imports may not reflect 100% of changes in the real effective exchange rate because:
A) exchange rates in many nations are fixed.
B) there are restrictions on capital inflows.
C) domestic price distortions, such as markups or taxes, reduce the impact of the exchange rate change.
D) the government has instituted price controls.
Correct Answer:
Verified
Correct Answer:
Verified
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