Real exchange rate increases if:

CA Foundation · Business Economics · RTP · September 2026
Real exchange rate increases if:
(A) (A) Domestic prices rise faster than foreign prices
(B) (B) Foreign prices rise relative to domestic prices
(C) (C) Nominal exchange rate is fixed
(D) (D) Trade barriers increase only

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Correct Option: (B)

Topics: International Trade

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