Other things equal, how would you expect the following shifts to affect a currencys real exchange rate
Question:
a. The overall level of spending doesn’t change, but domestic residents decide to spend more of their income on nontraded products and less on tradables.
b. Foreign residents shift their demand away from their own goods and toward the home country’s exports.
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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Related Book For
International Economics Theory and Policy
ISBN: 978-0273754206
9th Edition
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
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