Asked by Karla Reyes on Jun 16, 2024
Verified
How do the nominal exchange rate and the real exchange rate differ?
Nominal Exchange Rate
The rate at which one country's currency can be exchanged for another country's currency, not adjusted for inflation.
Real Exchange Rate
The real exchange rate compares the relative price of goods and services between countries, adjusted for differences in price levels.
- Identify the differences between nominal and real exchange rates and how they are calculated.
Verified Answer
MS
Miranda ShaverJun 23, 2024
Final Answer :
The nominal exchange rate is the rate at which a person can trade the currency of one country for the currency of another. The real exchange rate is the rate at which a person can trade the goods and services of one country for the goods and services of another.
Learning Objectives
- Identify the differences between nominal and real exchange rates and how they are calculated.