Respuesta :
The U.S. nominal exchange rate declines and prices rise faster abroad than in the United States. If the U.S. nominal exchange rate declines and prices rise faster abroad than in the United States, the real exchange rate decreases.
What happens when the nominal exchange rate increases?
A nominal appreciation causes the nominal exchange rate, Enom, to increase, increasing the amount of foreign currency that one dollar can purchase. With variable exchange rates, the words "depreciation" and "appreciation" are used. Devaluation and revaluation are the equivalents in a fixed-exchange-rate system.
Prices abroad increase more quickly than in the US while the nominal exchange rate of the US decreases. The real exchange rate falls when the nominal U.S. exchange rate falls and prices abroad grow more quickly than domestically.
The nominal exchange rate is the price at which commodities and services are bought and sold between the nations. The quantity of local money required to buy one unit of foreign currency.
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