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The Percentage Change in the Nominal Exchange Rate Equals the Percentage

Question 105

Multiple Choice

The percentage change in the nominal exchange rate equals the percentage change in the real exchange rate plus the:


A) foreign inflation rate minus the domestic inflation rate.
B) domestic inflation rate minus the foreign inflation rate.
C) foreign exchange rate minus the domestic exchange rate.
D) domestic interest rate minus the foreign interest rate.

Correct Answer:

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