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 Content hidden
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