Respuesta :
The lower the real exchange rate is, the less expensive domestic goods are relative to foreign goods, and the greater the demand is for net exports.
Explanation:
The real exchange rate is the average of a degree of international prices and domestic demand, multiplied by the nominal exchange rate. If a nation is liable to have export-import trade then, as much reduced price or cheaper commodities are bought by nation, lesser the price of product will be available in domestic market, which increases the demand by consumers. While more the rate or price of product brought from another country to make in available domestically, greater its price will be kept in domestic market, which may reduce the demand by customers.
