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I Will give thumbs up if answered 2. [10 pts) This question is about the real exchange rate Suppose that a basket of goods and
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2. [10 pts) This question is about the real exchange rate Suppose that a basket of goods and services in the United States costs $100 and in China the same basket costs 500. The current spot rate is Ex/8 = 7. If services are not tradeable across countries, is it possible to say whether China's exchange rate is over or undervalued relative to the dollar? ExplainStep by Step Solution
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