When managers respond to changes in the real exchange rate with their relative price,it is known as ________.

Question

Quizplus · Accepted Answer

This is known as exchange rate pass-through, which refers to the degree to which changes in the exchange rate affect the prices of imported goods in the domestic market. It is a measure of a company's economic exposure to exchange rate movements. The other options (A, B, and D) do not accurately describe this phenomenon.

When Managers Respond to Changes in the Real Exchange Rate