What is real exchange rate?
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the real exchange rate tells how much the goods and services in the domestic country can be exchanged for the goods and services in a foreign country.
Nominal Exchange Rates versus Real Exchange Rates. … While the nominal exchange rate tells how much foreign currency can be exchanged for a unit of domestic currency, the real exchange rate tells how much the goods and services in the domestic country can be exchanged for the goods and services in a foreign country.