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US real exchange rate

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Question

What is happening to the US real exchange rate in each of the following situations? Explain.;a. The US nominal exchange rate is unchanged but prices rise faster in the US than abroad.;b. The US nominal exchange rate is unchanged, but prices rise faster abroad than the US.;c. The US nominal exchange rate declines, and prices are unchanged in the US and abroad.;d. The US nominal exchange rate declines, and prices rise faster abroad than in the US.

 

Paper#21269 | Written in 18-Jul-2015

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