The percentage change in the real exchange rate between two nations is equal to the:
A) product of home worker productivity and foreign productivity divided by the share of traded goods in production.
B) difference between home and foreign worker productivity.
C) difference in the relative wage of foreign and home workers times the price level in the nation.
D) change in the difference between foreign worker productivity and home worker productivity multiplied by the share of nontraded goods in total production.

Question

Quizplus · Accepted Answer

The Answer of The percentage change in the real exchange rate between two nations is equal to the:
A) product of home worker productivity and foreign productivity divided by the share of traded goods in production.
B) difference between home and foreign worker productivity.
C) difference in the relative wage of foreign and home workers times the price level in the nation.
D) change in the difference between foreign worker productivity and home worker productivity multiplied by the share of nontraded goods in total production.

The Percentage Change in the Real Exchange Rate Between Two