# Real vs Nominal Exchange Rate

14. If real exchange rate is equal to nominal exchange rate then

A. domestic price level is equal to foreign price level.

B. domestic price level is higher than foreign price level.

C. domestic price level is lower than foreign price level.

D. None of the above.

15. If a Big Mac hamburger sells for the same dollar value in Tokyo as in Los Angeles then

A. exchange rates are said to be fixed.

B. purchasing power parity holds.

C. yen (JPY) have been replaced by dollars (USD) in Tokyo.

D. the inflation rate in each country must equal zero.

https://brainmass.com/economics/exchange-rates/real-vs-nominal-exchange-rate-273748

#### Solution Preview

14. If real exchange rate is equal to nominal exchange rate then

A. domestic price level is equal to foreign price level.

Since the real ...

#### Solution Summary

Multiple choice questions involving purchasing power parity and nomial exchange rates.