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Other Fields Homework Help Economics Topic started by: bluejean on Dec 4, 2022



Title: Newland has a fixed nominal exchange rate and has an overvalued real exchange rate. As a result, it ...
Post by: bluejean on Dec 4, 2022
Newland has a fixed nominal exchange rate and has an overvalued real exchange rate. As a result, it would like to have a 20% depreciation of its real exchange rate. However, it does not want to devalue its nominal exchange rate and abandon its peg. If foreign inflation is currently 3%, how much would domestic prices need to change?

▸ Increase by 17.6%

▸ Increase by 22.6%

▸ Decline by 22.6%

▸ Decline by 17.6%


Title: Newland has a fixed nominal exchange rate and has an overvalued real exchange rate. As a result, it ...
Post by: iammtz on Dec 4, 2022
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