Brief Principles of Macroeconomics...
Brief Principles of Macroeconomics...
If a Japanese car costs 1,500,000 yen, a similar American car costs $30,000, and a dollar can buy 100 yen, what are the nominal and real exchange rates?
Nominal exchange rate and real exchange rate.
Since $1 buys 100 yen, the nominal exchange rate is $1, which is equal to $100 yen.
Real exchange rate can be calculated as follows:
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