Question: 1. Real exchange rate: (20 marks) Other things being equal, how would you expect the following shifts to affect a currency's real exchange rate against

1. Real exchange rate: (20 marks) Other things being equal, how

1. Real exchange rate: (20 marks) Other things being equal, how would you expect the following shifts to affect a currency's real exchange rate against foreign currencies? a. The overall level of spending doesn't change, but domestic residents decide to spend more of their income on nontraded products and less on tradable goods. b. Foreign residents shift their demand away from their own goods and toward the home country's exports

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