The price of imported goods and services compared to domestic goods and services is:
A) the real exchange rate.
B) the consumer price index.
C) the import price deflator.
D) the nominal exchange rate.

Question

Quizplus · Accepted Answer

The real exchange rate compares the price of domestic goods and services to the price of foreign goods and services, taking into account the exchange rate and inflation differences between the two countries.

The Price of Imported Goods and Services Compared to Domestic