International Economics 10th Edition by Paul Krugman,Maurice Obstfeld ,Marc Melitz

Exercise 3

Other things equal, how would you expect the following shifts to affect a currency's real exchange rate against foreign currencies?
a. The overall level of spending doesn't change, but domestic residents decide to spend more of their income on nontraded products and less on tradables.
b. Foreign residents shift their demand away from their own goods and toward the home country's exports.