Suppose that, at a certain real exchange rate, a countrys net exports exceed its net capital outflows.
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Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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As in Figure 66 the real exchange rate e is the equilibri...View the full answer
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