If the nominal exchange rate, E UK US$, does not change, and the UK's price level has increased relative to the US's price level by 10 , then the real exchange rate (RER) a RER increases and an increase in the competitiveness of the UK goods b RER decreases and an increase in the competitiveness of the UK goods c RER decreases and an increase in the competitiveness of the US goods d All of the answers here are incorrect e RER increases and an increase in the competitiveness of the US goods

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Question: If the nominal exchange rate, E = UK/US$, does not change, and the UK's price level has increased relative to the US's price level by

If the nominal exchange rate, E = UK/US$, does not change, and the UK's price level has increased relative to the US's price level by 10%, then the real exchange rate (RER):

	a.	RER increases and an increase in the competitiveness of the UK goods
	b.	RER decreases and an increase in the competitiveness of the UK goods
	c.	RER decreases and an increase in the competitiveness of the US goods
	d.	All of the answers here are incorrect
	e.	RER increases and an increase in the competitiveness of the US goods

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