Answer: 0%.

The correct answer is **A (0%)**. The real exchange rate change is calculated using the formula: \[ \text{Real Exchange Rate Change} = \left( \frac{1 + \Delta P_f}{1 + \Delta P_d} \right) \times (1 + \Delta S) - 1 \] Where: - \(\Delta P_f\) is the foreign price change (6% for the Eurozone), - \(\Delta P_d\) is the domestic price change (2% for the US), - \(\Delta S\) is the nominal exchange rate change (-4% for USD/EUR). Plugging in the values: \[ \left( \frac{1 + 0.06}{1 + 0.02} \right) \times (1 - 0.04) - 1 \approx 0\% \] Thus, the real exchange rate remains approximately unchanged. Options B and C are incorrect due to miscalculations involving additive assumptions or misinterpretations of the nominal exchange rate change.

Author: LeetQuiz Editorial Team