Florin and Guilder are two countries separated by a narrow sea. They use currencies called, respectively, the Flop and the Gulp. Suppose the nominal exchange rate is 5 Flops per Gulp. A Guilderian trader buys a 40 Flop barrel of Florish pickles by exchanging 8 Gulps, and a Florish trader buys a 10 Gulp crate of Guilderian apples by exchanging 50 Flops. Then the Gulp appreciates to 10 Flops per Gulp. a. What price must the Guilderian pay for the same 40 Flop barrel of pickles? Answer is complete but not entirely correct. 320 8 Gulps b. How much must the Florish trader pay for the same 10 Gulp crate of apples? O Answer is complete but not entirely correct. 2 8 Flops
Florin and Guilder are two countries separated by a narrow sea. They use currencies called, respectively, the Flop and the Gulp. Suppose the nominal exchange rate is 5 Flops per Gulp. A Guilderian trader buys a 40 Flop barrel of Florish pickles by exchanging 8 Gulps, and a Florish trader buys a 10 Gulp crate of Guilderian apples by exchanging 50 Flops. Then the Gulp appreciates to 10 Flops per Gulp. a. What price must the Guilderian pay for the same 40 Flop barrel of pickles? Answer is complete but not entirely correct. 320 8 Gulps b. How much must the Florish trader pay for the same 10 Gulp crate of apples? O Answer is complete but not entirely correct. 2 8 Flops
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Open-economy Macroeconomics: Basic Concepts
Section: Chapter Questions
Problem 8PA
Related questions
Question
Solve it correctly please.
Transcribed Image Text:Florin and Guilder are two countries separated by a narrow sea. They use currencies called, respectively, the Flop and the Gulp.
Suppose the nominal exchange rate is 5 Flops per Gulp.
A Guilderian trader buys a 40 Flop barrel of Florish pickles by exchanging 8 Gulps, and a Florish trader buys a 10 Gulp crate of
Guilderian apples by exchanging 50 Flops.
Then the Gulp appreciates to 1O Flops per Gulp.
a. What price must the Guilderian pay for the same 40 Flop barrel of pickles?
O Answer is complete but not entirely correct.
320 8Gulps
b. How much must the Florish trader pay for the same 10 Gulp crate of apples?
Answer is complete but not entirely correct.
2 8 Flops
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Recommended textbooks for you
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781305971509
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781305971509
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
