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Suppose the United States is the domestic country, and the U.S. dollar is the domestic currency. The nominal exchange rate, E, is defined as domestic
Suppose the United States is the domestic country, and the U.S. dollar is the domestic currency. The nominal exchange rate, E, is defined as domestic currency per unit of the foreign currency. A rise in the nominal exchange rate, E, would imply
a. appreciation of the U.S. dollar
b. depreciation of the U.S. dollar
c. no effect on the value of the U.S. dollar
d none of the above
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