11. Consider the real-exchange rate approach. Suppose that Foreign output increased and that Home central bank changed its nominal money supply so that the relative price PH/PF would change. How did Home central bank changed its nominal money supply: Increased or Decreased? What would the approach predict on Home currency: Appreciation, Depreciation, No change, or No clear prediction? Change in MSH! Prediction on CH3 The Real Exchange Rate 1 =E> Home goods become less expensive and less valuable relative to foreign goods. The Real Exchange Rate 2 _E> Home goods become more expensive and more valuable relative to foreign goods