This case is aboutÂ CURRENCY
PUBLICATION DATE: August 22, 2002
Exchange Rates: Definitions and the Real Exchange RateÂ Case Solution
This note helps the reader learn about exchange rates and their two most important factors, which are appreciation and depreciation of currencies.
The purchasing power of a nation’s currency and as a measure of the competitiveness of a country’s products is also examined in terms of real exchange rate, where the rates are adjusted as per the rate of inflation. The note discusses variables that affect the real exchange rate. Homework questions are contained by the note.