Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 29, Problem 29.3RDE
Subpart (a):
To determine
The long-term trend of the exchange value of dollar and effect on the changes in exchange.
Subpart (b):
To determine
What happened to the exchange value of dollar in Oct 2014-2015.
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Students have asked these similar questions
On June 23, 2016, citizens of the United Kingdom voted in favor of a referendum to leave the European Union. The table below shows
the exchange rate between the U.S. dollar and the British pound 4 months before and 4 months after the vote. Complete the table,
giving all answers to three decimals.
Date
February 23, 2016
June 23, 2016
October, 23, 2016
Exchange Rates Between the U.S. Dollar and the British Pound
Units of foreign currency you can Number of U.S. dollars required to buy one
buy with 1 U.S. dollar
unit of the foreign currency
0.713
0.671
1.22
Suppose that the exchange rate between Great British pound and U.S. dollar is 0.78 pounds/dollar. The price index in the United States is 264 and the price index in Britain is 277. What is the real exchange rate between pounds and dollars?
Euro area
Norway
United Kingdom
Poland
China
Local Price:
(Foreign currency)
4.08
42.00
3.29
10.80
21.00
Actual Exchange Rate
(Dollars per unit of foreign currency)
1.12
0.12
1.25
0.26
0.14
PPP Exchange Rate (U.S. Dollars per British pound)
Source: "The Big Mac Index, Our Interactive Currency Comparison Tool, The Economist, last modified January 10, 2019, accessed September 27, 2019,
https://www.economist.com/news/2019/07/10/the-big-mac-index.
-
Dollar Price
(Dollars)
Purchasing-power parity (PPP) theory states that exchange rates would need to equalize the prices of goods in any two countries. For the dollar price
of a Big Mac to be the same in both countries, a U.S. citizen would need to be able to convert $5.74 into exactly GBP 3.29. To find the exchange rate
at which hamburger purchasing power is the same in both countries, divide the price in the United States by price in the United Kingdom:
$5.76
GBP 3.29
$1.74 per pound
4.11
2.81
2.94
4.57
5.04
Exporting Big Macs from the Euro…
Chapter 29 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 29 - Prob. 29.1.1RQCh. 29 - Prob. 29.1.2RQCh. 29 - Prob. 29.1.3RQCh. 29 - Prob. 29.1.4PACh. 29 - Prob. 29.1.5PACh. 29 - Prob. 29.1.6PACh. 29 - Prob. 29.1.7PACh. 29 - Prob. 29.1.8PACh. 29 - Prob. 29.1.9PACh. 29 - Prob. 29.1.10PA
Ch. 29 - Prob. 29.1.11PACh. 29 - Prob. 29.2.1RQCh. 29 - Prob. 29.2.2RQCh. 29 - Prob. 29.2.3RQCh. 29 - Prob. 29.2.4RQCh. 29 - Prob. 29.2.5PACh. 29 - Prob. 29.2.6PACh. 29 - Prob. 29.2.7PACh. 29 - Prob. 29.2.8PACh. 29 - Prob. 29.2.9PACh. 29 - Prob. 29.2.11PACh. 29 - Prob. 29.2.12PACh. 29 - Prob. 29.2.13PACh. 29 - Prob. 29.2.14PACh. 29 - Prob. 29.3.1RQCh. 29 - Prob. 29.3.2RQCh. 29 - Prob. 29.3.3RQCh. 29 - Prob. 29.3.4PACh. 29 - Prob. 29.3.5PACh. 29 - Prob. 29.3.6PACh. 29 - Prob. 29.3.7PACh. 29 - Prob. 29.3.9PACh. 29 - Prob. 29.3.10PACh. 29 - Prob. 29.4.2RQCh. 29 - Prob. 29.4.5PACh. 29 - Prob. 29.4.6PACh. 29 - Prob. 29.4.7PACh. 29 - Prob. 29.4.8PACh. 29 - Prob. 29.5.1RQCh. 29 - Prob. 29.5.2RQCh. 29 - Prob. 29.5.3RQCh. 29 - Prob. 29.5.4PACh. 29 - Prob. 29.5.5PACh. 29 - Prob. 29.5.6PACh. 29 - Prob. 29.5.7PACh. 29 - Prob. 29.1RDECh. 29 - Prob. 29.2RDECh. 29 - Prob. 29.3RDECh. 29 - Prob. 29.4RDECh. 29 - Prob. 29.5RDECh. 29 - Prob. 29.1CTE
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