For a given nominal exchange rate and domestic price level,a decrease in the foreign price level __________ the real exchange rate.

Name: For a given nominal exchange rate and domestic price level,a decrease in the foreign price level __________ the real exchange rate.
Brand: Quizplus
Rating: 4.9 (53 reviews)

Question

Quizplus · Accepted Answer

A decrease in the foreign price level, with a constant nominal exchange rate and domestic price level, increases the real exchange rate because it makes foreign goods cheaper relative to domestic goods.

For a Given Nominal Exchange Rate and Domestic Price Level,a