A rise in oil prices has caused input prices to increase throughout the economy, causing nominal GDP to increase by 13%. Meanwhile, the price level decreases by 2%. What is the real GDP growth rate during this period

Answers

Answer 1

The real GDP growth rate during this period will be 15%.

Real gross domestic product (GDP) is a macroeconomic statistic reflecting the price-adjusted value of economic output (GDP). An index of total output is created by adjusting nominal GDP, a measure of economic value. Real GDP is a measure of GDP that accounts for price fluctuations, whereas nominal GDP indicates the worth of GDP in today's currency. Usually, the GDP deflator is multiplied by nominal GDP to calculate real GDP (R). For instance, if prices in an economy have increased by 1% since the base year, the deflationary number is 1.01.

We know that,% change in Quantity =% change in Nominal −% change in Price.Therefore, real GDP growth rate (% change in quantity) equals the growth rate in nominal GDP (% change in value) minus the inflation rate (% change in price).

% change in Quantity =13%−(−2%)=15%

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Related Questions

Why is human capital the most important factor of production give three examples?

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An economy's human capital can help it grow. When management has more human capital, there is more creativity, more productivity, and better participation rates, all of which help the economy flourish.

Productivity is a measure of how effectively commodities or services are generated. Productivity is sometimes expressed as a ratio of the entire output to a single input or the total input used in a production process, or output per unit of input, typically over a predetermined time period. The most typical illustration is the (aggregate) measure of labor productivity, where GDP per worker is one example. The choice of a productivity definition (including those that do not relate to ratios of output to input) is dependent on the objective of the productivity measurement and/or the availability of data. The main cause of variability across productivity measures is often (directly or indirectly) connected to how the inputs and outputs are combined to produce such a ratio-type productivity measure.

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Which of the following is an example of a positive externality (additional social benefit)? Multiple Choice
O falling property values in a neighborhood where a disreputable nightclub is operating O the higher price you pay when you buy a heavily advertised product O the costs paid by a company to build an automated factory . O an increase in the value of land you own when a nearby development is completed

Answers

An increase in the value of land you own when a nearby development is completed  is an example of a positive externality (additional social benefit).

A third party experiences a positive externality when another party chooses to consume or produce a good or service. Positive externality can also convert to private benefit, which is the instance of an individual or single business organisation obtaining the advantage, albeit this results in a bigger social benefit because the benefits are typically more widespread than a single individual. The production or consuming sides of a transaction involving a good or service can experience positive externality.

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Commercial food innovators spend several months perfecting flavors using test kitchens and expert taste testers, and then even more time creating brand names, logos, and packaging. As marketers, using research to develop food innovation flavor profiles requires our _________ skills while using creativity to develop its branding for the marketplace requires our _________ skills.

Answers

As marketers, using research to develop food innovation flavor profiles requires our chemistry skills while using creativity to develop its branding for the marketplace requires our technical skills.

The flavor profiles of a food or beverage can be complex and varied, depending on the ingredients used. For example, a cup of coffee can have a flavor profile that is sweet and nutty, with notes of chocolate and caramel. A glass of red wine can have a flavor profile that is earthy and fruity, with hints of oak and spice.

A juic y steak can have a flavor profile that is savory and smoky, with a hint of garlic and herbs. A piece of dark chocolate can have a flavor profile that is rich and sweet, with notes of cocoa and nuts.

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Jessica puts some effort into comparing the various cell phone brands by researching online. For Jessica, the cell phone is considered a(n) ___________ offering.

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Jessica takes the time to compare the various cell phone brands through online research. For Jessica, the phone qualifies as an online service.

Why Researching online is important?

The process of conducting online research entails gathering data from the internet. With the development of the internet, the outdated pen-and-paper research techniques have been supplanted with online research techniques.

People use internet research to learn more about many topics, such as searching for products or conducting studies to further various fields. In today's society, doing research is essential for everything. It serves as a tool for knowledge development for everyone and makes learning easier for both novice and experienced learners. Data collecting is a step in the methodical inquiry process known as research.

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You will receive an inheritance of \$500,000$500,000 in 20 years on your 40th birthday. What is the value of the inheritance today if the discount rate is 10\%

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The present value of the inheritance at 10% discount rate in 20 years is $74321.81.

Give a brief account on Inheritance Value?

The tangible and intangible parts of a heritage constitute its total value. The successor's wealth is increased by mutually beneficial reinforcement. The value of an inheritance is determined by the purpose, not the amount of the gift.

The standard for inherited homes is usually the fair market value (FMV) of the property at the time of the deceased's death. If no valuation has been done at this point, you should consult a real estate professional to figure out her FMV. There is no other way to establish your claim to land.

Whether you receive an inheritance in the form of cash, stock, or real estate, it does not count as income for federal tax purposes.

PV = C/(1 + r)ⁿ

Where, PV = Present value

C = Inheritance ($500,000)

r = Discount rate (10%)

n = Time period (20 years)

PV = $500,000 / (1+10%)²⁰

= $74,322

Hence, $500,000 to be inherited after 20 years is worth $74,322 of today.

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What are the 5 advertising methods?

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6 Different Types of Paid Advertising Techniques Ads for searches. Advertising on social media. Advertising on display. Localized advertising. Print marketing. Public service announcements.

What are the 5 main advertising techniques?

Propaganda's basic strategies are successfully transferred to advertising and are still utilised most frequently. Utilization of Repetition, Product Claims, Association and Connection with the Customer, Persuading Customers to Join the Bandwagon, Promotions and Rewards. Product listing advertising, display ads, affiliate ads, native ads, social media ads, video ads, and email ads are the eight primary categories of internet advertisements.

The four Ps are a "marketing mix" made up of four essential components that are used to promote a good or service: product, pricing, place, and promotion. The four Ps are typically taken into account by firms when developing marketing plans and strategies to reach their target audience.  Every successful businessperson is aware that keeping existing clients pleased is more crucial than continuously attracting new ones.

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A manufacturer purchased $14500 worth of equipment with a useful life of twelve (12) years. Assuming 8% interest, the equivalent uniform annual cost of the equipment is ______________. A. 1830.04 B. 2015.57 C. 1860.65 D. 1924.15

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A manufacturer purchased $14500 worth of equipment with a useful life of twelve (12) years. Assuming 8% interest, the equivalent uniform annual cost of the equipment is 1924.15. The correct answers is option D.

What does the term interest mean?

The fee you pay to borrow money or the fee you charge to lend money is called interest. The most common way to represent interest is as a yearly percentage of the loan amount. The interest rate on the loan is known as this percentage.

What exactly is business interest?

The cost a company pays a lender (creditor) for a loan is called interest. Although many other arrangements are available, interest payments are typically based on the remaining balance of a loan and paid on a monthly basis. At a predetermined interest rate, interest is often computed as a percentage of the loan balance.

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How to calculate monthly payment on a loan Formula?

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Theoretically, figuring out your loan payment is easy. Your principle is calculated by dividing the entire amount you borrowed by the number of months you agreed to repay the loan (known as the term).

When interest charges are taken into account, it becomes challenging. Despite the fact that the majority of people make payments on a monthly basis, interest is calculated as an annual percentage rate, or APR.

Algebra can be challenging enough without adding to the complexity of loans. If you don't want to do the math yourself, you can quickly determine your monthly payment as well as the total amount of interest you'll have to pay by using a loan payment cost calculator.

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The minimum possible short-run average costs are equal to long-run average costs when a. Production is at any point on the LAC curve. b. the plant is producing at its short-run minimum point. c. the long-run curve is at a minimum point. d. short-run and long-run costs are declining. e. Production is at any point on the SAC curve.

Answers

When the long-run curve reaches a minimum point, the lowest short-run average costs are equal to long-run average costs.

What is the typical cost ?

Average cost, also referred to as average total cost, is the price per unit of output (ATC). We can determine the average cost by dividing the entire cost by the total volume of output.

Businesses produce and supply a wide variety of items at different price points in different market settings. For them to maximize their market profit, the production expenses must also be taken into account. To better comprehend how firms calculate their cost functions and arrive at their production plans, we must carefully explore the two main cost categories, marginal cost and average cost.

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Audit firms are increasingly considering operational data such as manufacturing logs, customer relationship management data and supply chain data primarily to

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Audit firms are increasingly considering the operational data such as production logs, customer relationship management data, and supply chain data to provide a more comprehensive view of an organization's financial health.

By incorporating this data into an audit, companies are now able to detect the anomalies that could indicate fraud or errors. In addition, supply chain data can provide information about the sources of supplies and the costs of those supplies, helping to identify potential errors in the cost reporting. Ultimately, by incorporating operational data into the audit process, companies are able to uncover potential problems that might otherwise go undetected.

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In a case of mortgage loan delinquency, it is the ______ that determines when foreclosure proceedings will commence.

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When it comes to home loan default, lenders decide when foreclosure procedures will begin. Hence, the right answer is lenders.

What does the term "lenders" signify in accounting?

A lender is a company that lends money to other companies or individuals in return for a set or variable interest rate and a guarantee to repay. Lenders are required for a variety of reasons, including the following:

To offer money for large purchasesTo enhance the number of funds for working capitalTo provide a backup line of credit to help with erratic cash flows

Lenders may opt to offer just specific sorts of loans or to limit their lending activity to specific categories of companies. A lender, for example, may specialize in individual mortgages or company credit lines.

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Is 1000 a possible credit score?

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It is impossible to have a credit score of 1,000 because credit scoring models do not support it.

Why does this occur?

Experian claims that some credit scoring models can reach as high as 900 or 950, but those are institution-specific ratings that are exclusively utilized in that business.For a $1,000 personal loan, you most likely need a credit score of at least 580. Most lenders who offer personal loans of $1,000 or more must accept applicants with terrible credit or better and sufficient income to cover the monthly payments in order to approve the loan.In general, you need a credit score of at least 620 to qualify for a loan to purchase a house. For a traditional loan, the majority of lenders have that minimum credit score threshold. That being said, it's still

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bmc below is a chart illustrating global trade patterns in 2018. which of the following countries was te world's largest importer

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United States was the largest importer as compared to the other countries such as Japan, Germany and China.

Who is the Large exporter in the world?

According to the U.S. International Trade Commission's (USITC) newest book, Recent Trends in U.S. Services Trade, 2020 Annual Report, the United States has the largest services market and was the world's top exporter and importer of services in 2018.

Nearly half of all imports into the United States come from five nations. China, Canada, Mexico, Japan, and Germany are those countries. Prior to 2007, when China overtook Canada as the leading exporter to the United States, the United States purchased the most goods from Canada. 54% of the $2.8 trillion in products imported by the United States in 2021 came from these five nations.

Five nations account for more than half of American imports: China, Canada, Mexico, Japan, and Germany.Despite the fact that the United States is capable of producing the items it imports, these exporting nations enjoy a competitive advantage.Their capacity to manufacture at a cheaper cost or far higher quality than American businesses gives them a comparative edge.The majority of imports into the United States are made up of consumer and capital items.

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the touring of star athletes and teams to promote the popularity of a particular sport were

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The touring of star athletes and teams to promote the popularity of a particular sport were Sports Management/marketing agencies.

What are marketing agencies?

A marketing agency, often known as a creative agency or an ad agency, is a company that specializes in developing, organizing, and managing to advertise and occasionally other forms of promotion and marketing for its customers. Marketing agencies are often independent of the clients they work with; marketing agenciescould be an internal division or agency that lends a fresh perspective to the attempt to market the clients' goods or services, or they could be an external company. For its customers, an agency can also manage their whole marketing and branding initiatives, which may also include sales.

Business and corporate entities, non-profit institutions, and private agencies make up the typical clientele of advertising companies. Advertising production companies can be engaged to create radio, online, in-store, out-of-home, mobile, and augmented reality (AR) advertisements.

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What are 5 factors for determining your credit rating?

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FICO Scores are calculated using many different pieces of credit data in your credit report. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).

What is FICO Score?A credit score is a number that is used to estimate your likelihood of making timely loan payments. Companies use credit scores to determine things like whether to give you a mortgage or a credit card. They are also used to establish the credit limit and the interest rate you will pay on a loan or credit card. Learn more general information about credit scores.Fair Isaac Corporation is referred to as FICO. A system for calculating credit scores based on data gathered by credit reporting agencies was pioneered by FICO. The majority of lenders still use FICO scores when determining whether to offer you a loan or credit card, despite the fact that other businesses now have credit scoring formulas (or "models"). 

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before a customer buys penny stock, the sec generally requires that broker deal must do which of the following: [A] approve each penny stock trade in advance of the purchase
[B] provide the customer with a disclosure document the explains the risks involved
[C] provide current market quotes, if available
*[D] All of the above

Answers

The SEC generally requires that broker-dealers must do all of the options [A], [B], and [C] before a customer buys penny stock.  Thus option D is the correct answer

Approving each penny stock trade in advance of the purchase allows the broker-dealer to ensure that the customer understands the risks and is making an informed decision.

Providing the customer with a disclosure document that explains the risks involved ensures that the customer is aware of the potential for high volatility, lack of liquidity, and potential fraud. Providing current market quotes, if available, gives the customer a sense of the current value of the penny stock, which can help them make a more informed decision.

In summary, All of the options [A], [B], and [C] are required by SEC to ensure customer protection and informed decision-making before buying penny stock.

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Selecting a job based on your skills and interests is important, because on average, a person with a full time job works approximately _____ hours each year.a.1200b.1600c.2000d.2400 Please select the best answer from the choices providedABCD

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Selecting a job based on your skills and interests is important, because on average, a person with a full time job works approximately 2000 hours each year.

Your choices for work activities and settings are reflected in your career interests. You may make a better educated and smart career selection by determining your professional interests. By choosing a job that utilizes your skills and is consistent with your beliefs and preferences, you are following your career interests. Simply simply, you're discovering regular activities that you love. It's crucial to periodically review your professional assets because your interests in a field may change over time. For instance, you could uncover a passion you weren't aware you possessed or one you haven't had a chance to pursue yet. Interests in a career are significant since they reveal your choices for a workplace. There are several advantages to coordinating your profession with your hobbies.

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If the Chinese government wished to increase the amount of U. S. Beef that is allowed to be imported into China, it would enact:

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The Chinese government would have to negotiate a new trade deal with the United States to increase the amount of American beef it is allowed to import into China. This could include reducing existing tariffs or other trade barriers that make it difficult to import U.S. beef into China.

The Chinese government would also have to ensure that imported US beef meets all safety and quality standards before it is allowed to enter the country. The Chinese government could also make it easier for American beef to obtain the necessary certifications and inspections to ensure that the beef meets China's requirements. Finally, the Chinese government could increase the amount of American beef it is allowed to import by increasing the quota, which is the maximum amount of a particular commodity that can be imported into China.

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A nurse working in a medical practice who earns $40,000 per year has a liquid net worth of $60,000. She overhears some of the doctors in her office talking about hedge funds and is interested in using her cash funds to make an investment. She should be informed that hedge funds are:

Answers

A) This nurse doesn't have enough money to invest in a hedge fund. She ought to be informed that these are investments with low regulation and high risk that are only suitable for wealthy and experienced investors.

What is the most crucial information that a customer who invests in a fund of hedge funds should know?

When it comes to redemption, a fund of hedge funds will follow the same guidelines. The most crucial information to disclose to a client is the investor's inability to easily exit the investment.

What kind of risk should an ETN investor take into account that is not associated with an ETF?

ETFs are subject to market risk, whereas ETNs are subject to both the investment bank issuing the ETN's credit risk and market risk. The credit risk issue is not irrelevant in light of the rapid collapse of the banking structure during the 2008 financial crisis. Banks do break up.

The nurse does not meet these requirements, but an investor who is "accredited" earns at least $200,000 per year or has a $1 million net worth.

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Full Question = A nurse working in a medical practice who earns $40,000 per year has a liquid net worth of $60,000. She overhears some of the doctors in her office talking about hedge funds and is interested in using her cash funds to make an investment. She should be informed that hedge funds are:

I high risk securities

II high return securities

III only available to accredited investors

IV like mutual funds

A. I and III

B. I and IV

C. II and III

D. II and IV

What are the 5 stages of migration?

Answers

There are five common migration approaches: Retire, Replace, Re-host, Rearchitect, and Retain.

What are the  stage of migration?

With Retire, the application is at end of life, and it is easier to retire, than migrate the application. Replace is very common where business workloads have equivalent Software as a Service offerings. Re-host or (also known as lift and shift) is where an application is migrated to a set of virtual machines as part of an Infrastructure as a Service (IaaS) offering from a cloud provider. Rearchitect requires converting the application to run as a Platform as a Service (PaaS), which is significantly more costly than rehosting, but can be advantageous as the upgraded application will likely have lower on-going management complexity and operating cost compared to rehosting. retain refers to retaining the application on-premises for when continuing in place is the only realistic option. This option is common for applications with regulatory or geographic requirements that cannot be met by current cloud offerings.

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BUURCAR
Which of the following is NOT true of career fairs?

Answers

A careers fair's goal is to facilitate networking between businesses and job seekers. These programs are for those who are unsure about their next move, wish to change careers, or want to learn more about a specific field. It does not include gaining favors from another person.

What happens at a job or career fair?

Hundreds of employers and even more job seekers will attend live career fairs. Each employer will have a separate booth where visitors may talk to representatives and current workers to learn more about the who, what, where, why, and how of the company. This is your chance to network and meet potential employers. Along the way, you can also pick up information packets, attend seminars, pass out your resume, and possibly even depart with an interview scheduled. Everyone is welcome at recruitment events like career fairs, which is a wonderful feature. There are chances for people of all ages and levels of expertise due to a large number of diverse employers in attendance.

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Assume an investor sells short 100 shares of ABC and while the investor has the short stock position, ABC pays a dividend. The investor:
(A)Owes the dividend to the lender of the stock.(B)Will Receive the dividend from the lender of the stock.(C)Will not be involved in the dividend situation in any way.(D)Will receive the dividend from the company and also from the lender of the stock.

Answers

The investor Will receive the dividend from the company and also from the lender of the stock. The market participant that the general public most frequently associates with the stock market is an investor.

Investors are those who buy stock in a company with the intention of holding it for a long time because they think it will do well in the future. You have invested in ownership if you purchase stock in a corporation. The initial investment market sum will continue to be correlated to the overall worth of the business. For those with the correct skill set, jobs in investing are an excellent alternative due to the positive employment forecast and high earnings.

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Bart Software has 8.2 percent coupon bonds on the market with 25 years to maturity. The bonds make semiannual payments and currently sell for 109.75 percent of par. a. What is the current yield on the bonds

Answers

The current yield on the bonds would be 7.47%. A bond's current yield expresses its annual coupon as a percentage of the market price and can be above or below par.

Calculation:

Given:

coupon bonds = 8.2%

coupon price =  109.75%

Hence,

Current yield = Annual coupon payment / coupon Price

Current yield = 82 / 1097.50 = 0.0747 or 7.47%

Why is Current Yield Important?

Conceptually, the current yield represents the bondholder's yield if the investment were to be held next year. A bond's current yield indicates the interest rate that a bond or other bond investment is actually paying. It is an important factor that determines the profitability of bonds. So the current yield is also how much an investor would get from holding the bond for year.

How do you measure current yields on bonds?

Current Yield on a Bond uses the market price of the bond instead of the face value to calculate the yield of the bond. It is calculated by dividing the annual coupon payment by the current market price.

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The bonds' current yield would be 7.47%. The current yield of a bond, which can be above or below par, indicates the annual coupon as a percentage of the market price.

How do you determine the current yields on bonds?

Current Yield on a Bond uses the market price of the bond instead of the face value to calculate the yield of the bond. It is calculated by dividing the annual coupon payment by the current market price.

Given:

coupon bonds = 8.2%

coupon price =  109.75%

Hence,

Current yield = Annual coupon payment / coupon Price

Current yield = 82 / 1097.50 = 0.0747 or 7.47%

How Important Is Current Yield?

The current yield conceptually represents the bondholder's yield if the investment were held for the following year. The interest rate that a bond or other bond investment is actually paying is indicated by the bond's current yield. It has a significant role in determining how profitable bonds are. The annual return on a bond that an investor holds for a year is also included in the current yield.

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What are the positive environmental trends seen today? Many industries are taking measures to reduce the use of {Blank box} -depleting substances and are turning to {Blank box} energy sources though they may seem expensive.First box

Gold

Carbon dioxide

Ozone

Answers

One of the positive trends we are seeing in today's businesses is that industries are taking steps to reduce their use of Ozone-depleting substances and are turning to renewable energy sources.

What is Ozone depletion?When chlorine and bromine atoms come into contact with ozone molecules in the stratosphere, they destroy them. Before it is removed from the stratosphere, one chlorine atom can destroy over 100,000 ozone molecules. Ozone can be destroyed faster than it can be created.When chlorofluorocarbons (CFCs) and halons—gases previously found in aerosol spray cans and refrigerants—are released into the atmosphere, they deplete the ozone layer.Although there are several links between ozone depletion and climate change, ozone depletion is not a major cause of climate change. Atmospheric ozone has two effects on the Earth's temperature balance. It absorbs ultraviolet radiation from the sun, which heats the stratosphere.

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Instead of letting their son borrow money from the bank, Andrea’s parents give her an

additional ₱500,000 and Andrea decided to place all his funds into a time deposit

account. If he is willing to wait for 5 years, at what interest rate should he be investing his money, at compounding interest, to raise ₱1,000,000?

Answers

To get a total of ₱1,000,000 from Andrea's ₱500,000 deposit, she should invest it in a term account with a compound interest rate of 5.2%. This means that the amount of interest earned on his deposit will be added to his principal for the next period and the interest will be calculated on the total amount.

This will allow him to earn a total of ₱1,000,000 in 5 years provided he does not make any further deposits or withdrawals. It's important to note that the exact interest rate can vary depending on the bank or financial institution you choose to invest with, so it's important to shop around for the best rate. In addition, the interest rate can change over time, so it is important to monitor his investment carefully to ensure that he gets the best return on his investment.

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explain the significance of civil labor force blue collar workers white collar workers service workers service workers unskilled workers semiskilled workers skilled workers professinalals minum wage

Answers

Blue-collar jobs are ones that require more physical exertion or manual labor. Electricians, mechanics, power plant operators, and farmers are examples of blue-collar occupations.

On the other hand, white-collar jobs typically involve working in offices as clerical, administrative, or managerial positions.

What are the advantages of working in the blue collar industry?

Numerous blue-collar jobs provide excellent benefits in addition to a respectable wage. These include paid vacation days, retirement savings plans, and health insurance. One area in which white-collar jobs frequently outperform blue-collar jobs is in this one.

What does "blue-collar workforce" entail?

Most of the time, blue collar workers work outside of an office (on a construction site, on a production line, driving, etc.). They carry out their responsibilities with their hands and physical abilities. Construction worker, machine operator, millwright, assembler, and truck driver are all examples of blue collar workers.

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A(n) _____ contract carries the least risk for suppliers.
a. CPPC b. FFP
c. CPAF
d. FP-EPA

Answers

The least risky contract for a supplier is an FP-EPA one. Long-term contracts are utilized FP-EPA contracts, which permit pre-defined modifications to the contract price because of altered circumstances.

This can entail variations in inflation or higher or lower prices for particular commodities.

The nature of this contract is similar to that of a fixed-price contract. However, the former has a specific provision that allows for price adjustments, whereas the latter is non-negotiable.

In this specific contract, the buyer and seller concur on pre-established standards for the price adjustment. The market's inherent uncertainties make this conceivable. This particular contract is advantageous for long-term projects or those that span several years because it is crucial to remember that market dynamics alter over time.

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Jacob just signed a lease for his brokerage firm. The lease agreement includes taxes as part of the base rent. What kind of lease did he sign?

Answers

The type of lease that Jacob just signed is a Gross Lease. A gross lease is when the landlord agrees to pay all expenses associated with the property, such as taxes, insurance and maintenance.

In exchange, the tenant agrees to pay an agreed rent each month to cover all these expenses. This type of lease is attractive to tenants because it provides consistent and predictable rent payments over the term of the lease. It is also attractive to landlords as it provides them with a set amount of income each month regardless of the expenses associated with the property. All in all, Gross Lease is an attractive option for both landlords and tenants.

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Your business statistics class had an exam last week. The average exam score for the class is an example of ________.

Answers

Answer:

Descriptive Statistics

Answer: Descriptive Statistics

Explanation:

Other things the same, if the U.S. real exchange rate appreciates, U.S. net exports
a. increase and U.S. net capital outflow decreases.
b. decrease and U.S. net capital outflow increases.
c. and U.S. net capital outflow both increase.
d. and U.S. net capital outflow both decrease.

Answers

Other things the same, if the U.S. real exchange rate appreciates, U.S. net exports increase and U.S. net capital outflow decreases.

What occurs when the real exchange rate rises?

An increase in the real exchange rate is a true appreciation. The same amount of local commodities can be exchanged for more international goods with genuine appreciation. When the real exchange rate is high, net exports fall but imports rise because a real depreciation is a reduction in the real e. On the other hand, when the actual exchange rate is low, net exports climb as exports do. The effects of changes in the real exchange rate are better illustrated by this connection.

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