Econ110B - services or US assets. Supply of US foreign...

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Nominal exchange rate: the rate that two currencies can be traded for each other Country/Region Foreugn currency/ us$ 1 year ago Foreugn currency/ us$ Us $/ Foreign curreny .70 uk 0.63 uk1.59 1.24 can1.06 14.52 mex12.97 89.67 jap90.96 0.78 eu0.72 Nominal appriciation: an increase in the value of the currency relative to other currencies Nominal appriciation the opposite E nominal exchange rate: foreign currency/domestic currency ^ D$ > ^E* ^S$ > (-^)E*
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Demand from US foreign exchange People who are holding foreign currency and want to purchase US goods or
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Unformatted text preview: services or US assets. Supply of US foreign exchange Lately Demand have gone down and supply gone up Real exchange rate is the price of the avg. domestic goods or service relative to the price of the average foreign good or service when prizes are expressed in term of a common currency Real exchange rate is the price of a domestic good when measured in foreign currency devided by the price in the foreign good. Real appriciation is an increase in relative price of domestic goods in terms of foreign goods. äåö...
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This note was uploaded on 10/21/2010 for the course ECON 1530 taught by Professor Ohly during the Spring '10 term at Dartmouth.

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Econ110B - services or US assets. Supply of US foreign...

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