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6 Cards in this Set
- Front
- Back
nominal exchange rate |
one dollar is 90 yen |
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Real exchange rate |
Harder to specify, what one currency can buy in another currency in terms of values? How many hamburgers can I buy? |
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nominal depreciation |
"weaker" or one dollar buys less of another currency |
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nominal appreciation |
"stronger" or one dollar buys more of another currency |
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formula to calculate real exchange rate |
delta e(nom)/e (nom) = delta e/ e + (pi)for- (pi) |
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J curve |
after a devaluation in currency, net exports look like a j, and eventually surplus |