The effect of Brexit on the exchange rate of euro or dollar.

Question

Suppose that on January 1 2009, the TL price of the dollar is 1.40 over the year, inflation rate in Turkey is 25 % and U.S. inflation rate is 10%. If the exchange rate is $1= 1.50 TL at the end of the year, which currency appear to be overvalued.? Explain your answer

Answer 1

Question

Chapter 11, Problem 11.2IP

To determine

The effect of Brexit on the exchange rate of euro or dollar.

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Suppose that on January 1 2009, the TL price of the dollar is 1.40 over the year, inflation rate in Turkey is 25 % and U.S. inflation rate is 10%. If the exchange rate is $1= 1.50 TL at the end of the year, which currency appear to be overvalued.? Explain your answer

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