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What is happening to the U.S. real exchange rate in each of the following situations? Explain.a. The U.S. nominal exchange rate is unchanged, but prices rise faster in the United States than abroad.b. The U.S. nominal exchange rate is unchanged, but prices rise faster abroad than in the United States.c. The U.S. nominal exchange rate declines, and prices are unchanged in the United States and abroad.d. The U.S. nominal exchange rate declines, and prices rise faster abroad than in the United States.
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this question. We have to answer that What is happening to the U. S. Real exchange rate in each of the following situations. So for part eight, we have that the U. S. Normal exchange rate is unchanged, but prices rise faster in the US than abroad. So all this means is that the result would be that the real extreme trade rises. As you know that the domestic prices, the multiplying factor in the given formula for part B, considering the given situation, the result would be that the real extreme jerry declines. As you know, that foreign price. The divide is a dividing factor in the formula. Finally, for part C, the nominal extremely has declined on the price they're unchanged. So that means that the real exchanger has to decline since the nominal exchange rate is the multiplying factor that has declined, resulting in the entire value off decline. Finally, for ah, part D, we have the nominal exchange rate. Declines on the prices rise faster in the U. S. So all that means
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