1. If I want to get gas in the USA I can get some for $4.29 USD per Gallon right now, while it is $1.99 CAD per Liter. Given that there are 3.78 Liters in a Gallon, calculate the real exchange rate between a Canadian Liter of gas and an American Liter (not Gallon) of Gas, given that one Canadian Dollar currently buys about 0.79 American Dollars. 2. Inflation numbers came out today, and the CPI rose 6.7% March 2021 to March 2022. In the USA the CPI rose 8.5% for that same time period, the biggest increase since 1982. Both the Bank of Canada and the US Federal Reserve have been raising their key interest rates? Why? Last week, the Bank of Canada raised, and in 2 weeks

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1. If I want to get gas in the USA I can get
some for $4.29 USD per Gallon right now,
while it is $1.99 CAD per Liter. Given that
there are 3.78 Liters in a Gallon, calculate
the real exchange rate between a Canadian
Liter of gas and an American Liter (not
Gallon) of Gas, given that one Canadian
Dollar currently buys about 0.79 American
Dollars.
2. Inflation numbers came out today, and
the CPI rose 6.7% March 2021 to March
2022. In the USA the CPI rose 8.5% for that
same time period, the biggest increase
since 1982. Both the Bank of Canada and
the US Federal Reserve have been raising
their key interest rates? Why? Last week,
the Bank of Canada raised, and in 2 weeks
the Fed is expected to raise -- what will
happen to the exchange rate (1 CAD = 0.79
USD as mentioned in (a) above) if the Fed
decides not to raise? Why?
Transcribed Image Text:1. If I want to get gas in the USA I can get some for $4.29 USD per Gallon right now, while it is $1.99 CAD per Liter. Given that there are 3.78 Liters in a Gallon, calculate the real exchange rate between a Canadian Liter of gas and an American Liter (not Gallon) of Gas, given that one Canadian Dollar currently buys about 0.79 American Dollars. 2. Inflation numbers came out today, and the CPI rose 6.7% March 2021 to March 2022. In the USA the CPI rose 8.5% for that same time period, the biggest increase since 1982. Both the Bank of Canada and the US Federal Reserve have been raising their key interest rates? Why? Last week, the Bank of Canada raised, and in 2 weeks the Fed is expected to raise -- what will happen to the exchange rate (1 CAD = 0.79 USD as mentioned in (a) above) if the Fed decides not to raise? Why?
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