The real exchange rate is
A) the rate which banks charge the least risky businesses.
B) the rate which District Federal Reserve Banks charge member banks.
C) the rate at which the goods and services purchased in different countries can be exchanged one for another.
D) the rate at which the monies of different countries can be exchanged one for another.

Question

Quizplus · Accepted Answer

The real exchange rate is the rate at which goods and services of one country can be exchanged for those of another. It adjusts the nominal exchange rate by the price levels of the two countries, providing a more accurate measure of the exchange of real value between them.

The Real Exchange Rate Is