Author Question: The nominal exchange rate (E) as defined in the text represents A) the number of units of foreign ... (Read 23 times)

future617RT · **on:** Jun 30, 2018

The nominal exchange rate (E) as defined in the text represents

A) the number of units of foreign currency you can obtain with one unit of domestic currency.
B) the number of units of domestic goods you can obtain with one unit of foreign goods.
C) the price of domestic currency in terms of foreign currency.
D) none of the above
E) both A and C

Question 2

Suppose workers and firms expect the overall price level to increase by 5. Given this information, we would expect that

A) the nominal wage will increase by less than 5.
B) the nominal wage will increase by exactly 5.
C) the nominal wage will increase by more than 5.
D) the real wage will increase by 5.
E) the real wage will increase by less than 5.