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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 |
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Edward Liu
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® 2024 Level I Curriculum, Volume 1, Module 7.