Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

________ is the the number of units of domestic currency one must give up to get an unit of foreign currency?

Options:

Nominal exchange rate

Real Exchange Rate

Purchasing Power Parity

Open economy multiplier

Correct Answer:

Nominal exchange rate

Explanation:

The correct answer is option 1: Nominal exchange rate

Nominal exchange rate: The number of units of domestic currency one must give up to get an unit of foreign currency; the price of foreign currency in terms of domestic currency.