Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 22, Problem 5WNG
To determine
The cost in dollars of a Mexican good.
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Students have asked these similar questions
The Nominal exchange rate is .8 British pounds per dollar. If a burger in the United States costs $10, how many British pounds must a burger cost in London for purchasing-power parity to hold?
The equation for purchasing power parity is – the domestic price should equal the exchange rate multiplied by the foreign price. Suppose your shirt sells for 10 euros in Europe. If purchasing power parity holds, what should be the price of that same shirt in the United States if it takes 1.145 dollars to get one euro?
If the exchange rate is 1 US dollar= 10 Mexican pesos, then 1 Mexican peso equals ____
a)20 cents in US currency
b) 1 cent in US currency
c) 1 US dollar
d) 5 cents in US currency
e) None of the choices is correct
Chapter 22 Solutions
Macroeconomics
Ch. 22.2 - Prob. 1STCh. 22.2 - Prob. 2STCh. 22.2 - Prob. 3STCh. 22.2 - Prob. 4STCh. 22.3 - Prob. 1STCh. 22.3 - Prob. 2STCh. 22.3 - Prob. 3STCh. 22.3 - Prob. 4STCh. 22 - Prob. 1QPCh. 22 - Prob. 2QP
Ch. 22 - Prob. 3QPCh. 22 - Prob. 4QPCh. 22 - Prob. 5QPCh. 22 - Prob. 6QPCh. 22 - Prob. 7QPCh. 22 - Prob. 8QPCh. 22 - Prob. 9QPCh. 22 - Prob. 10QPCh. 22 - Prob. 11QPCh. 22 - Prob. 12QPCh. 22 - Prob. 13QPCh. 22 - Prob. 14QPCh. 22 - Prob. 15QPCh. 22 - Prob. 16QPCh. 22 - Prob. 1WNGCh. 22 - Prob. 2WNGCh. 22 - Prob. 3WNGCh. 22 - Prob. 4WNGCh. 22 - Prob. 5WNG
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- Suppose the spot exchange rate today between the US dollar and currency of country W is US $1.9905 per unit of currency of country W, and that for the US dollar and the currency of country V is US $0.00779 per unit of country V. The following forward rates are also quoted today: Country W Currency Country V Currency 30 days 1.9908 0.007774 60 days 1.9597 0.007754 90 days 1.9337 0.007736 Explain what someone who enters into a 30-day forward contract to deliver the currency of country W is agreeing to do? Explain who someone who enters into a 90-day forward contract to buy the currency of country V is agreeing to do? What can you infer about the relationship between US and country W’s short term interest rates and US and country V’s short-term interest rates?arrow_forwardIf the exchange rate is 1 US dollar = 20 Mexican pesos, then 1 Mexican peso equals --------- a) 5 cents in US currency b) 20 cents in US currency c) None of the choices is correct d) 1 US dollar e) 10 cents in US currencyarrow_forwardIn mid-2006, a British pound sterling (the monetary unit in the United Kingdom) was worth 1.4 euros (the monetary unit in the European Union). If a U.S. dollar bought 0.55 pound sterling in 2006, what was the exchange rate between the U.S. dollar and the euro?arrow_forward
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