Country Level Economics: Policies, Institutions, and Macroeconomic Performance | Online Course Support

Suppose the productivity of the non-tradables sector in the Pakistan economy permanently reduces due to a natural calamity while the tradable sector remains unaffected. If all economic policies and other exogenous events in all countries remain unchanged, in the long-run, the real exchange rate of Pakistani Rupee vis-à-vis the US dollar:

 
 
 
 
 
 

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