We define real exchange rate as the relative price of, Ask an Expert

Economics

We define real exchange rate as the relative price of domestic goods to foreign goods in domestic currency and we define nominal exchange rate as the amount of domestic currency necessary to exchange for 1 unit of forein currency. When real exchange rate increases without changing domestic and foreign prices, how does nominal exchange rate change?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91954042

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