Question

2 economics project on exchange rate determination

Answer 1

Answer:

Calculating Exchange Rates. Imagine there are two currencies, A and B. On the open market, 2 A's can buy one B. The nominal exchange rate would be A/B 2, which means that 2 As would buy a B. ... The real exchange rate is the nominal exchange rate times the relative prices of a market basket of goods in the two countries.

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