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In the Long Run, the Nominal Exchange Rate

Question 212

Multiple Choice

In the long run, the nominal exchange rate


A) is a monetary phenomenon, determined by the quantities of money in two countries.
B) is not related to the real exchange rate, since the real exchange rate is the true value of currencies.
C) will not change if prices in one country change, since prices are nominal variables.
D) is fixed by world central banks, as indicated by the fixed exchange rate system.

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