Q7.When currency becomes less valuable for the Rest of the world, it is called
Answer : Option BExplaination / Solution:
Currency's value goes up (or down) if the demand for it goes up more (or less) than the supply does. In the short run this can happen unpredictably for a variety of reasons, having to do with trade flows,speculation, or other factors in the international capital market.
Answer : Option BExplaination / Solution:
The nominal exchange rate is defined as the number of units of the domestic currency that can purchase a unit of a given foreign currency. A decrease in this variable is termed nominal appreciation of the currency.
Answer : Option BExplaination / Solution:
Real exchange rate tells how much the goods and services in the domestic country can be exchanged for the goods and services in a foreign country.