Describing the us real exchange rate


What is happening to the US real exchange rate in each of the following situations? Explain.

a. The US nominal exchange rate is unchanged but prices rise faster in the US than abroad.

b. The US nominal exchange rate is unchanged, but prices rise faster abroad than the US.

c. The US nominal exchange rate declines, and prices are unchanged in the US and abroad.

d. The US nominal exchange rate declines, and prices rise faster abroad than in the US.

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Macroeconomics: Describing the us real exchange rate
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