Given S(USD/AUD) = 0.7899, the price of a consumption basket in the US is$100 and the price of the same basket in Australia is $120. What is the real exchangerate and is it higher or lower than the nominal exchange rate?
Given S(USD/AUD) = 0.7899, the price of a consumption basket in the US is$100 and the price of the same basket in Australia is $120. What is the real exchangerate and is it higher or lower than the nominal exchange rate?
Chapter6: Government Influence On Exchange Rates
Section: Chapter Questions
Problem 3BIC
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Given S(USD/AUD) = 0.7899, the price of a consumption basket in the US is$100 and the price of the same basket in Australia is $120. What is the real exchangerate and is it higher or lower than the nominal exchange rate?
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