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harvir sandhu
on Nov 16, 2024

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When exchange rates are defined as foreign currency per dollar and foreign goods per US goods, the ability to profit by purchasing wheat in the United States and selling it in China implies that the

A) nominal exchange rate is less than 1.
B) nominal exchange rate is greater than 1.
C) real exchange rate is less than 1.
D) real exchange rate is greater than 1.

Nominal Exchange Rate

The rate at which one country's currency can be exchanged for another's, not adjusted for inflation.

Foreign Currency

Currency used in a country that is not the domestic currency where a person or company resides.

US Goods

Products manufactured or produced within the United States, encompassing a wide range of commodities, from food to technology.

  • Understand the concepts of nominal and real exchange rates.
  • Interpret currency appreciation and depreciation in the context of global trade.
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CD
Cuinie DonosoNov 17, 2024
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