Comparing the two graphs you have generated, would you say that real exchangerate fluctuations arise primarily from nominal exchange-rate fluctuations or from
changes in domestic and foreign price levels?
Q6. Plot the exchange rate of the Hong Kong dollar relative to the U.S. dollar from
January 1981 to the present. Was the Hong Kong dollar generally appreciating or
depreciating relative to the U.S. dollar between 1981 and late 1983? What
happened after 1983? Research and find an explanation for the value of the
exchange rate after 1983.