A currency is said to appreciate in real terms if, other things remaining unchanged, a) domestic prices fall b) foreign prices decrease c) exchange rate of the domestic currency defined as ‘number of units of domestic currency per unit of foreign currency’ increases d) None of the above

A currency is said to appreciate in real terms if, other things remaining unchanged, a) domestic prices fall b) foreign prices decrease c) exchange rate of the domestic currency defined as ‘number of units of domestic currency per unit of foreign currency’ increases d) None of the above

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter11: Foreign Exchange, Trade, And Bubbles

Section: Chapter Questions

Problem 6MC

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Question

A currency is said to appreciate in real terms if, other things remaining unchanged,
a) domestic prices fall
b) foreign prices decrease
c) exchange rate of the domestic currency defined as ‘number of units of domestic
currency per unit of foreign currency’ increases
d) None of the above

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