What is happening to the U.S. real exchange rate ineach of the following situations? Explain.a. The U.S. nominal exchange rate is unchanged,but prices rise faster in the United States thanabroad.b. The U.S. nominal exchange rate is unchanged, butprices rise faster abroad than in the United States.c. The U.S. nominal exchange rate declines, andprices are unchanged in the United States andabroad.d. The U.S. nominal exchange rate declines, andprices rise faster abroad than in the United States.

Question

What is happening to the U.S. real exchange rate in
each of the following situations? Explain.
a. The U.S. nominal exchange rate is unchanged,
but prices rise faster in the United States than
abroad.
b. The U.S. nominal exchange rate is unchanged, but
prices rise faster abroad than in the United States.
c. The U.S. nominal exchange rate declines, and
prices are unchanged in the United States and
abroad.
d. The U.S. nominal exchange rate declines, and
prices rise faster abroad than in the United States.

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