Nominal and real exchange rate

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Reference no: EM1367427

14. If real exchange rate is equal to nominal exchange rate then

A. domestic price level is equal to foreign price level.
B. domestic price level is higher than foreign price level.
C. domestic price level is lower than foreign price level.
D. None of the above.

15. If a Big Mac hamburger sells for the same dollar value in Tokyo as in Los Angeles then

A. exchange rates are said to be fixed.
B. purchasing power parity holds.
C. yen (JPY) have been replaced by dollars (USD) in Tokyo.
D. the inflation rate in each country must equal zero.

Reference no: EM1367427

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