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Exchange Rates: Definitions and the Real Exchange Rate
Christmann, Petra Technical Note BP-0457 / Published August 22, 2002 / 6 pages.
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Product Overview

This note defines exchange rates and explains changes in exchange rates (appreciations and depreciations). The note also introduces the concept of the real exchange rate as an inflation adjusted measure of the purchasing power of a country's currency and as a measure of the competitiveness of a country's products. The note discusses factors that influence the real exchange rate. The note contains assignment questions.


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  • Overview

    This note defines exchange rates and explains changes in exchange rates (appreciations and depreciations). The note also introduces the concept of the real exchange rate as an inflation adjusted measure of the purchasing power of a country's currency and as a measure of the competitiveness of a country's products. The note discusses factors that influence the real exchange rate. The note contains assignment questions.

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