1) Calculate the change in the real exchange for country A when the official exchange rate rises by 20%, the domestic price for non-tradable rises by 50% and the world price of tradable increases 7%. Is this a real appreciation or depreciation? What are the implications for trade and growth in country A ?

1) Calculate the change in the real exchange for country A when the official exchange rate rises by 20%, the domestic price for non-tradable rises by 50% and the world price of tradable increases 7%. Is this a real appreciation or depreciation? What are the implications for trade and growth in country A ?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: International Trade And Finance

Section: Chapter Questions

Problem 10SQP

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