All of the following statements are true about the real exchange ...

[j.rubin]

All of the following statements are true about the real exchange rate, = , EXCEPT
 
  A) a greater change in P (domestic price) compared to a change in P (foreign price) necessitates a rise in the nominal rate, Rn, to keep the real rate unchanged.
  B) a pegged exchange rate system requires tight control of the money supply.
  C) there is a one-to-one correspondence between the real and nominal exchange rates.
  D) an expansionary monetary policy raises the real exchange rate.

Question 2

Which of the following is NOT a likely result of intraindustry trade based on internal economies of scale?
 
  A) Job creation at domestic firms entering international trade
  B) Lower prices for the domestic consumers of the product now being traded
  C) Increased sales and lower per unit costs for the firm doing the exporting
  D) Higher prices for the exported product

[covalentbond]

Answer to Question 1

A

Answer to Question 2

D