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Question 5: Real Exchange Rates [12 Points](a) What is the difference between the real exchange rate

Question 5: Real Exchange Rates [12 Points](a) What is the difference between the real exchange rate and the nominal exchange rate? [4 Points]Suppose a box of hot chilies in Thailand costs 1000 baht, while the same box of chilies in the US costs$25. If the exchange rate between the Thai baht and the US dollar is $1= 50 baht:(b) How many boxes of chilies can you buy in Thailand for one box purchased in the US? [4 Points](c) Suppose the exchange rate changes to $1= 60 baht. How many boxes of chilies can you buy inThailand for the amount it takes to purchase one box in the US? What is the effect on US net exports?Explain. [4 Points]

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