What may cause a nominal appreciation of the domestic currency if the real exchange rate is constant? Select one: a. a decline in the terms of trade. b. an increase in the price of the foreign good. c. an increase in the price of the domestic good. d. an increase in the domestic rate of inflation.

What may cause a nominal appreciation of the domestic currency if the real exchange rate is constant? Select one: a. a decline in the terms of trade. b. an increase in the price of the foreign good. c. an increase in the price of the domestic good. d. an increase in the domestic rate of inflation.

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter31: Open-Economy Macroeconomics: Basic Concepts

Section31.2: The Price For International transaction: Real And Nominal Exchange Rate

Problem 2QQ

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Question

What may cause a nominal appreciation of the
domestic currency if the real exchange rate is
constant? Select one: a. a decline in the terms
of trade. b. an increase in the price of the
foreign good. c. an increase in the price of the
domestic good. d. an increase in the domestic
rate of inflation.

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