Which exchange rate would you use to determine if the ...

[Jkov05]

Which exchange rate would you use to determine if the international competitiveness of a country had deteriorated or improved relative to a specific foreign country?
 a. The nominal effective exchange rate.
  b. The real effective exchange rate.
  c. The nominal bilateral exchange rate.
  d. The real bilateral exchange rate.

Question 2

In what context does the use of real exchange rates make the most sense?
 a. For determining if one nation's real GDP has increased faster than another nation's real GDP.
  b. For determining if one nation's nominal GDP has increased faster than another nation's nominal GDP.
  c. For calculating whether to purchase foreign or domestic stocks and bonds.
  d. For determining changes in a nation's relative international competitiveness.
  e. For calculating the cost of buying foreign goods and services.

[joewallace]

Answer to Question 1

.D

Answer to Question 2

.D

[Jkov05]

Excellent

[tkempin]

TYSM