Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 21, Problem 5RQ
To determine
Change in supply of dollar.
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Suppose a basket of goods costs $100 in the U.S. and €80 in Spain. If the
exchange rate is $1.50 per euro, then the real exchange rate, in terms of U.S.
baskets per Spanish basket, is
O 0.8
O 0.9
O 1.1
O 1.2
In Ireland, a pint of beer costs 2.2 Irish pounds. In Australia, a point of beer costs 4 Australian dollars.
If the nominal exchange rate is 2 Australian dollars per Irish pound, what is the real exchange rate
from the Irish perspective?
O 0.91
O 1.1
3.64
O 4.4
Suppose that a Big Mac in the US costs $3.15 and 2.99 Bolivianos in Bolivia. The currency exchange
rate is $1 US buys 6.54 Bolivianos. According to the law of one price, the exchange rate should be
$1 US buys Bolivianos and so, over time, the US dollar should
O 0.95; appreciate
O 0.95; depreciate
9.49; appreciate
9.49; depreciate
Chapter 21 Solutions
Macroeconomics
Ch. 21.1 - Prob. 1QQCh. 21.1 - Prob. 2QQCh. 21.1 - Prob. 3QQCh. 21.1 - Prob. 4QQCh. 21.A - Prob. 1ADQCh. 21.A - Prob. 1ARQCh. 21.A - Prob. 1APCh. 21 - Prob. 1DQCh. 21 - Prob. 2DQCh. 21 - Prob. 3DQ
Ch. 21 - Prob. 4DQCh. 21 - Prob. 5DQCh. 21 - Prob. 6DQCh. 21 - Prob. 7DQCh. 21 - Prob. 8DQCh. 21 - Prob. 9DQCh. 21 - Prob. 10DQCh. 21 - Prob. 11DQCh. 21 - Prob. 1RQCh. 21 - Prob. 2RQCh. 21 - Prob. 3RQCh. 21 - Prob. 4RQCh. 21 - Prob. 5RQCh. 21 - Prob. 6RQCh. 21 - Prob. 7RQCh. 21 - Prob. 8RQCh. 21 - Prob. 9RQCh. 21 - Prob. 10RQCh. 21 - Prob. 1PCh. 21 - Prob. 2PCh. 21 - Prob. 3PCh. 21 - Prob. 4PCh. 21 - Prob. 5P
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- You converted 15 million yen into pounds on 6/1. On 6/2, you converted your pounds into euros. Finally, on 6/3, you converted your euros to dollars. How many dollars will you end up with on 6/3? Round intermediate steps to four decimals and your final answer to two decimals. O 84,375 99,264.71 121,500 None of the abovearrow_forwardThe current exchange rate is £1.00 = $2.00. Compute the correct balances in Bank A's correspondent account(s) with Bank B if a currency trader employed at Bank A buys £45,000 from a currency trader at Bank B for $90,000 using its correspondent relationship with Bank B: O a. Bank A's pound-denominated account at B will rise by £45,000. O b. Bank B's dollar-denominated account at A will fall by $90,000. O c. Bank B's pound-denominated account at A will rise by £45,000. O d. Bank A's dollar-denominated account at B will rise by $90,000.arrow_forwardSay that in Miami, in Coral Gables, a big mac cost $4.25 and a large fries cost $2.50. In Japan, the total cost of a big mac and large fries is 81 Yen. The according to purchasing power parity, the exchange rate that equalizes purchasing power of this basket of goods is 8.5 О 12 O 6.5 O 10arrow_forward
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