A rise in the real exchange rate is called
A)a real depreciation.
B)a real appreciation.
C)a real bargain.
D)a real devaluation.

Question

Quizplus · Accepted Answer

A rise in the real exchange rate means that the currency has become relatively more valuable compared to other currencies, thus it is a real appreciation. A real depreciation would be the opposite, where the currency becomes relatively less valuable compared to other currencies. A real bargain and a real devaluation are not commonly used terms in economics.

A Rise in the Real Exchange Rate Is Called