Assuming All Other Things Equal, What Would Happen to the U.S

question 81

Essay

Assuming all other things equal, what would happen to the U.S. dollar real exchange rate under each of the following circumstances?
a.The U.S.nominal exchange rate depreciates.
b.U.S.domestic prices increase.
c.Prices in the rest of the world rise.

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Definitions:

Net Income

The remaining profit of a company post deduction of all expenses, taxes, and costs from its total revenues.

Unearned Revenues

Income received by a company for goods or services to be provided in the future, which is recorded as a liability until earned.

Liabilities

Financial obligations or debts owed by a business or individual to creditors.

Revenue Earned

Income a company receives from its normal business activities, usually from the sale of goods and services to customers.