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    Exam 18: Trade and Development
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    An Increase in Nontradables Prices Causes the Real Exchange Rate
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An Increase in Nontradables Prices Causes the Real Exchange Rate

Question 20

Question 20

Multiple Choice

An increase in nontradables prices causes the real exchange rate (RER) to:


A) appreciate.
B) depreciate.
C) remain unchanged.
D) equal the nominal exchange rate.

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