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What has happened to the real exchange rate

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Assume the price level in Mexico has increased 6% since 2014 (the base year) and prices in the US have increased 2% since 2014. If the nominal exchange rate has increased from 10 pesos/USD in 2014 to 12 pesos/USD in 2016, what has happened to the real exchange rate? how did you find it?

Reference no: EM132502948

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