This note sets exchange rates and explains exchange rate changes (additions, depreciation and amortization). The note also introduces the concept of the real exchange rate as inflation adjusted measure of the purchasing power of the currency of a country and as a measure of the competitiveness of a country’s products. The note discusses factors that affect the real exchange rate. The note contains matching questions.

This note sets exchange rates and explains exchange rate changes (additions, depreciation and amortization). The note also introduces the concept of the real exchange rate as inflation adjusted measure of the purchasing power of the currency of a country and as a measure of the competitiveness of a country’s products. The note discusses factors that affect the real exchange rate. The note contains matching questions.
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from
Petra Christmann
Source: Darden School of Business
6 pages.
Publication Date: Aug 22, 2002. Prod #: UV0976-PDF-ENG
Exchange Rates: Definitions and the real exchange rate HBR case solution

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