Question: 2. What is the important difference between the nominal exchange rate and the real exchange rate? (A) The nominal exchange rate accounts for a nations

2. What is the important difference between the nominal exchange rate and the real exchange rate? (A) The nominal exchange rate accounts for a nation’s trade deficit. (B) The nominal exchange rate accounts for the difference in inflation. (C) The real exchange rate is used on the foreign exchange market. (D) The real exchange rate accounts for the difference in aggregate price levels. (E) There is no substantive difference between the two rates on the forex.

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