Q1. Assuming no changes in the prices of a representative consumption basket in two currency areas over the measurement period, the nominal exchange rate: A) can be extrapolated to calculate interest rates. B) can be converted to the real exchange rate using interest rates. C) is equal to the real exchange rate.
Q2. In the currency market, traders quote the: A) nominal exchange rate. B) base currency rate. C) real exchange rate.
Q3. If we compare the prices of goods in two countries through time, we can use the price information in concert with the quoted foreign exchange rate to calculate the: A) real exchange rate. B) interest rate spread. C) nominal exchange rate.
|