a) Explain how real interest rate affects net exports b) A friend from the U.S. visited Ghana and exclaimed that cost of living for visitors to Ghana is much cheaper now than it was 2 years ago. According to your friend, 2 years ago, a dollar was equivalent to 5 cedis. Today, a dollar buys 7.5 cedis. Is your friend right or wrong, if inflation over the 2-year period is 25 percent in the U.S. and 100 percent in Ghana?
a) Explain how real interest rate affects net exports b) A friend from the U.S. visited Ghana and exclaimed that cost of living for visitors to Ghana is much cheaper now than it was 2 years ago. According to your friend, 2 years ago, a dollar was equivalent to 5 cedis. Today, a dollar buys 7.5 cedis. Is your friend right or wrong, if inflation over the 2-year period is 25 percent in the U.S. and 100 percent in Ghana?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 33P: The index number representing the price level changes from 110 to 115 in one year and then from 115...
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