Which of the following measures the value of a currency against a basket of other currencies?

Which of the following measures the value of a currency against a basket of other currencies?
[A]Real Exchange Rate
[B]Effective Exchange Rate
[C]Real Effect Exchange Rate
[D]Nominal Exchange Rate

Real Effect Exchange Rate
Real Effect Exchange Rate (REER) is the weighted average of a country’s currency relative to an index or basket of other major currencies adjusted for the effects of inflation. The weights are determined by comparing the relative trade balances, in terms of one country’s currency, with each other country within the index.


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