Are domestic residents traveling abroad helped or hurt

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Suppose the real exchange rate falls (perhaps from a neutral level) for the domestic currency of a country.

(a) Are domestic residents traveling abroad helped or hurt?

(b) Are domestic businesses that use foreign parts helped or hurt?

(We'll say these businesses don't face foreign competition for their products.)

(c) Are domestic producers that face foreign competition helped or hurt?

(We'll say these producers don't import parts.)

(d) What happens to domestic inflation?

Reference no: EM132240792

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