Exhibit 7 3 compares the real effective exchange rates for Japan, the United States, and the Euro area If the comparative real effective exchange rate was the main determinant, does Japan or the United States have a competitive advantage in exporting Which of the two has an advantage in importing E...

Exhibit 73 shows that the real effective exchange rate has varied considerably fro ...

Exhibit 7.3 compares the real effective exchange rates for Japan, the United States, and the Euro area.

Question:

Exhibit 7.3 compares the real effective exchange rates for Japan, the United States, and the Euro area. If the comparative real effective was the main determinant, does Japan or the United States have a competitive advantage in exporting? Which of the two has an advantage in importing? Explain why.
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...