The price of domestic goods in terms of foreign goods is referred to as the

Question

Quizplus · Accepted Answer

The price of domestic goods in terms of foreign goods is a measure of the real exchange rate. The nominal exchange rate simply measures the value of one currency in terms of another, while purchasing power parity refers to the equalization of prices across countries. The relative inflation rate may affect the real exchange rate, but it is not a direct measure of it.

The Price of Domestic Goods in Terms of Foreign Goods