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What does the real exchange rate measure?
Which exchange rate is more relevant for assessing the cost-effectiveness of importing goods?
Calculate the real exchange rate if the nominal exchange rate is 1.5 AUD/USD, the price of a product in the US is \$10, and the price in Australia is AUD 12.
Given a nominal exchange rate of 0.9 GBP/USD, a price level of \$5 for a US product, and £4 for the same product in the UK, what is the real exchange rate?
Calculate the real exchange rate if the nominal exchange rate is 1.2 CAD/USD, the price of a product in the US is \$8, and the price in Canada is CAD 10.
How might an appreciation of the domestic currency affect consumer behavior in terms of purchasing foreign goods?
How might a depreciation of the domestic currency affect consumer behavior in terms of purchasing foreign goods?
If the nominal exchange rate changes from 1 USD = 108 JPY to 1 USD = 112 JPY, what has happened to the USD?
How does a stronger domestic currency affect the ability to purchase foreign goods?
What happens to the foreign currency when the domestic currency appreciates?