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The Real Exchange Rate Can Be Decomposed into Two Parts,the

Question 39

Multiple Choice

The real exchange rate can be decomposed into two parts,the __________ and the __________.


A) nominal exchange rate;ratio of the domestic price level to the world price level
B) nominal exchange rate;the difference between the domestic and foreign interest rate
C) interest rate differential;the difference between the domestic and foreign inflation rate
D) nominal exchange rate;ratio of the price of exported goods to imported goods
E) interest rate differential;ratio of the domestic price level to the world price level

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