How can long-run values in the real exchange rate change, International Economics

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Q. How can long-run values in the real exchange rate change?

Answer: A elevate in world relative demand for U.S output origins a long-run real appreciation of the dollar against the euro a fall in the real dollar/euro exchange rate.

A proportional expansion of U.S output causes a long-run real depreciation of the dollar against the euro (a rise in the real dollar/euro exchange rate).

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