If the nominal exchange is measured in units of domestic currency per unit of foreign currency, then the real exchange rate equals:
A) the ratio of the domestic price level to the foreign price level divided by the nominal exchange rate.
B) the ratio of the foreign price level to the domestic price level divided by the nominal exchange rate.
C) the nominal exchange rate multiplied by the ratio of the foreign price level to the domestic price level.
D) the nominal exchange rate multiplied by the ratio of the domestic price level to the foreign price level.
Correct Answer:
Verified
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