A-LevelEconomicsInternational economic issues9708/12 · May/June 2015 · Q271 Mark

What is the real exchange rate?

Athe exchange rate at which foreign currency traders can buy a country's currency

Bthe exchange rate between a country's currency and the US Dollar

Cthe exchange rate with international differences in price inflation removed

Dthe weighted average of a country's exchange rates with its major trading partners

✓ Correct answer

C: the exchange rate with international differences in price inflation removed

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2015 Paper 1 Variant 2, question 27.

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