Changes in the real exchange rate can be caused by which of the following?
A) Changes in the foreign demand for domestically produced products
B) Changes in the real interest rate between countries
C) Changes in a country's productivity
D) All of the above
E) None of the above

Question

Quizplus · Accepted Answer

Changes in the real exchange rate can be influenced by various factors including changes in foreign demand for domestically produced products, differences in real interest rates between countries, and changes in a country's productivity. These factors affect the relative prices of domestic and foreign goods, thereby influencing the real exchange rate.

Changes in the Real Exchange Rate Can Be Caused by Which