Answered: If the real exchange rate rises 2%,…

If the real exchange rate rises 2%, domestic inflation is 3%, and foreign inflation is 4%, what is the percent change in the nominal exchange rate? 5% 3% 1% -1%

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter22: International Finance

Section: Chapter Questions

Problem 5WNG

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Question

If the real exchange rate rises 2%, domestic inflation is 3%, and foreign inflation is 4%, what is the percent
change in the nominal exchange rate?
5%
3%
1%
-1%

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