Author Question: What are the differences between the real exchange rate and nominal exchange rate? Explain. What ... (Read 92 times)

BrownTown3

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What are the differences between the real exchange rate and nominal exchange rate? Explain.
 
  What will be an ideal response?

Question 2

Which of the following individuals first discovered the relationship between unemployment and inflation for the United States?
 
  A) Solow and Friedman
  B) Samuelson and Solow
  C) Friedman and Phillips
  D) Friedman and Phelps



javimendoza7

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Answer to Question 1

The real exchange rate, EP/P, represents the relative price of domestic goods in terms of foreign goods. The nominal exchange rate, E, is the pound price of domestic currency or, equivalently, the relative price of domestic currency in terms of foreign currency.

Answer to Question 2

B



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