A country's domestic currency's real exchange rate, q, is defined as
A) E.
B) E times P.
C) E times P .
D) (E times P )/P.
E) P/(E times P ).
Question 2
Which one of the following statements is the MOST accurate?
A) Given PUS, when the money supply rises, the dollar interest rate declines and the dollar depreciates against the euro.
B) Given YUS, when the money supply rises, the dollar interest rate declines and the dollar depreciates against the euro.
C) Given PUS and YUS, when the money supply decreases, the dollar interest rate declines and the dollar depreciates against the euro.
D) Given PUS and YUS, when the money supply rises, the dollar interest rate declines and the dollar appreciates against the euro.
E) Given PUS and YUS, when the money supply rises, the dollar interest rate declines and the dollar depreciates against the euro.
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