Re: DSE 2012 paper discussion-Please join

Posted by Akshay Jain on May 30, 2014; 3:00pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2012-paper-discussion-Please-join-tp7590218p7591104.html


In this first of all you have to find how the real exchange rate is defined
the net exports (exports-imports) is calculated in terms of domestic goods
so the term NX=X-IM/e is in terms of domestic goods
X are in terms of domestic goods and IM are in terms of foreign goods
so to convert Imports in terms of domestic goods we divide it by real ex rate
From this try to find whether e=foreign goods/domestic goods or e=domestic goods/foreign goods....??
and then the defination of e in terms of nominal ex rate and ratio of prices.