Which of the following is likely to be true of the nominal and the real exchange rates in the short run and in the long run if prices in two countries do not respond to exchange rate changes?
A) The real and the nominal exchange rates between the currencies move proportionally in both the short run and the long run.
B) The real and the nominal exchange rates between the currencies move proportionally in the short run but not in the long run.
C) The real and the nominal exchange rates between the currencies move proportionally in the long run but not in the short run.
D) The real and the nominal exchange rates between the currencies remain constant over time.
Correct Answer:
Verified
Q122: If a Japanese toy costs 40 yen
Q123: When the ratio of domestic prices to
Q124: The following figure shows the net exports
Q125: In most circumstances,the nominal and real exchange
Q126: When the real exchange rate appreciates,U.S.goods become
Q128: Everything else being equal,if the dollar appreciates
Q129: The _ exchange rate depends on the
Q130: Everything else being equal,if the dollar depreciates
Q131: When the ratio of domestic prices to
Q132: Which of the following statements is true?
i.The
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents