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Describe the behavior of real exchange rates

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Reference no: EM13871901

1. What is the effect of a real appreciation of the domestic currency on the purchasing power of domestic residents?

2. Will an appreciation of the domestic currency help or hurt a domestic exporter?

3. Describe the behavior of real exchange rates.

4. What methods can be used to forecast future spot rates of exchange?

5. How can the international parity conditions allow you to forecast next year's spot rate?

Reference no: EM13871901

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