Question

The nominal exchange rate is the a rate at which a person can trade the currency of one country for the currency of another. b the number of goods a person can trade for a similar good in another country. c price of a good in one country divided by the price of the same good in another. d nominal interest rate in one country divided by the nominal interest rate in the other country.

Answer 1

rate at which a person can trade the currency of one country for the currency of another

Step-by-step explanation:

Nominal exchange rate is a rate at which a person can trade the currency of one country for the currency of another.

Nominal exchange rate = real exchange rate + inflation rate

Real exchange rate is the number of goods a person can trade for a similar good in another country.

The real exchange rate has been adjusted for inflation.

Real éxchange rate = nominal exchange rate - inflation rate

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