Suppose for Home: Ms=2488, Md/P=5723-62770*R, P=3 Suppose for Foreign:Ms=1736, Md/P=7147-65320*R, P=2 Suppose Absolute PPP holds. What is the expected exchange rate Ee? Answer: x (1.473)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter6: Managing In The Global Economy
Section: Chapter Questions
Problem 12E
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Suppose for Home: Ms=2488, Md/P=5723-62770*R, P=3
Suppose for Foreign:Ms=1736, Md/P=7147-65320*R, P=2
Suppose Absolute PPP holds. What is the expected exchange rate Ee?
Answer:
x (1.473)
Transcribed Image Text:Suppose for Home: Ms=2488, Md/P=5723-62770*R, P=3 Suppose for Foreign:Ms=1736, Md/P=7147-65320*R, P=2 Suppose Absolute PPP holds. What is the expected exchange rate Ee? Answer: x (1.473)
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