Asked by
Jazmin Madrigal
on Nov 16, 2024
Verified
Other things the same, an increase in the nominal exchange rate raises the real exchange rate.
Nominal Exchange Rate
The current market price at which one currency can be exchanged for another.
Real Exchange Rate
The rate at which two currencies can be exchanged for each other, adjusted for inflation, which represents the true purchasing power.
- Conduct calculations to ascertain and clarify the real exchange rate between currencies.
Verified Answer
JA
Learning Objectives
- Conduct calculations to ascertain and clarify the real exchange rate between currencies.