The real exchange rate is defined to be the:
A) value of goods in one nation relative to the value a similar set of goods in another country.
B) rate people exchange goods and services in a domestic market.
C) rate at which firms in different nations would be willing to exchange goods.
D) value of goods in one nation relative to the value the same set of goods in another country.

Question

Quizplus · Accepted Answer

The real exchange rate measures the value of goods and services of one country relative to the value of the same set of goods and services in another country, after adjusting for differences in price levels between the two countries. The other options do not accurately describe the concept of real exchange rate.

The Real Exchange Rate Is Defined to Be The