BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

Solutions

Chapter
Section
BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

If a nation’s currency doubles in value on foreign exchange markets, the currency is said to ________, reflecting a change in the _______ exchange rate.

a. appreciate, nominal

b. appreciate, real

c. depreciate, nominal

d. depreciate, real

To determine

Effect of doubling the currency.

Explanation

Option (a):

If a nation’s currency doubles in value on foreign exchange markets, the currency is said to be appreciated effecting a change in the nominal exchange rate. The nation doubled its currency value means the currency is appreciated. When the value of currency increases, it affects the exchange rate of currency that a person can trade. Thus, option “a” is correct.

Option (b):

When the value of currency increases, it affects the nominal exchange rate and does not reflect in the real exchange rate. Real exchange rate is the rate at which a person can trade goods and services of the country for the goods and services of another country...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

How do accounting concepts, principles, standards, and rules differ?

Intermediate Accounting: Reporting And Analysis

What is task-data dependency?

Accounting Information Systems

What is a trademark?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

PV AND LOAN ELIGIBILITY You have saved 4,000 for a down payment on a new car. The largest monthly payment you c...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)