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Basic Question 2 of 12
The higher the real exchange rate, the ______ your relative purchasing power.
B. lower
C. They are not related.
A. higher
B. lower
C. They are not related.
User Contributed Comments 2
| User | Comment |
|---|---|
| vatsal92 | As inflation increases, prices go up...and you end up buying less than before. |
| khalifa92 | either way, as long as XR goes up purchasing power decreases |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe the foreign exchange market, including its functions and participants, distinguish between nominal and real exchange rates, and calculate and interpret the percentage change in a currency relative to another currency
CFA® 2025 Level I Curriculum, Volume 1, Module 7.