1) Calculate the change in the real exchange for country A when the official exchange rate rises by 20%, the domestic price for non-tradable rises by 50% and the world price of tradable increases 7%. Is this a real appreciation or depreciation? What are the implications for trade and growth in country A ?
1) Calculate the change in the real exchange for country A when the official exchange rate rises by 20%, the domestic price for non-tradable rises by 50% and the world price of tradable increases 7%. Is this a real appreciation or depreciation? What are the implications for trade and growth in country A ?
Chapter22: International Finance
Section: Chapter Questions
Problem 10QP
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1) Calculate the change in the real exchange for country A when the official exchange rate rises by 20%, the domestic
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