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The figure below plots the U.S real exchange rate (i.e., real trade-weighted exchange rate) and net exports as a percentage of GDP (i.e., often referred

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The figure below plots the U.S real exchange rate (i.e., real trade-weighted exchange rate) and net exports as a percentage of GDP (i.e., often referred to as trade openness). Is the theoretically predicted relationship of the real exchange rate and net exports visible in the figure? [2 marks] FRED - Real Trade Weighted U.S. Dollar Index: Broad (left) (Real Exports of Goods and Services.Real imports of goods and services) Real Gross Domestic Product (right) 130 0.06 120 0.03 110 0.00 (Bil. of Chn. 2012 $-Bil. of Chn. 2012 $)/Bil. of Chn. 2012 $ Index Mar 1973=100 0.03 100 S -0.06 90 E 0.09 80 1990 2005 2010 2015 1975 1980 1985 1995 2000

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