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ByAdminIt will increase. That cannot be determined. It will decrease. It will remain the same.
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Suppose the price level in the US is 150 while the corresponding price level in the UK is 100. If the nominal exchange rate is e=2/3£/$, what is the real exchange rate between the US dollar and the British pound (that is, how many baskets of British goods can be purchased with one corresponding basket of US goods)?
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