How are the real and nominal exchange rates affected?

Nov 2017
1
0
earth
[FONT=&quot]How does each of the following shifts affect the US dollar real and nominal exchange rates against foreign currencies. [/FONT]

[FONT=&quot](a) The aggregate productivity level rises in the US. [/FONT]

[FONT=&quot](b) Productivity rises in the traded sector of the US economy. [/FONT]

[FONT=&quot](c) Productivity rises in the nontraded sector of the US economy. [/FONT]

[FONT=&quot](d) The aggregate demand for US goods goes up. [/FONT]

[FONT=&quot](e) The overall level of spending does not change but domestic residents decide to spend more of their income on nontraded products relative to traded goods. [/FONT]

[FONT=&quot](f) The overall level of spending does not change but domestic residents decide to spend more of their income on traded products relative to nontraded goods. [/FONT]

[FONT=&quot](g) Foreign residents shift their demand away from their own goods and towards the home country's exports. [/FONT]


[FONT=&quot]My answers: [/FONT]

[FONT=&quot]a) Decrease in real and nominal exchange rates [/FONT]

[FONT=&quot]b) Increase in real and nominal exchange rates [/FONT]

[FONT=&quot]c) No change in real and nominal exchange rates [/FONT]

[FONT=&quot]d) Increase in real and nominal exchange rates [/FONT]

[FONT=&quot]e) Increase in real and nominal exchange rates [/FONT]

[FONT=&quot]f) Decrease in real and nominal exchange rates [/FONT]

[FONT=&quot]g) Increase in real and nominal exchange rates [/FONT]

[FONT=&quot]I'm quite sure I got atleast a couple wrong. I would greatly appreciate if you could point them out.[/FONT]