EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 39, Problem 3RQ
To determine
The exchange rate changes.
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In Ireland, a pint of beer costs 2.2 Irish pounds. In Australia, a point of beer costs 4 Australian dollars.
If the nominal exchange rate is 2 Australian dollars per Irish pound, what is the real exchange rate
from the Irish perspective?
O 0.91
O 1.1
3.64
O 4.4
11. Suppose that the nominal exchange rate between the euro and the British pound
was €0.80 per £1.0 last year, one unit of German output cost €4.0 last year, and one unit of
British output cost £6.0 last year.
a. What was last year's real exchange rate between the U.K. and Germany, expressed as the
cost of British output (i.e. - the quantity of German output that exchanges for 1 unit of
British output)? In which country were goods more expensive last year?
b. Suppose that between last year and this year the British pound depreciated by 25% against
the euro (a 25% decrease in the number of euros required to buy 1 pound). If the price of
goods in the U.K and Germany are unchanged from last year, what is this year's new real
exchange rate? In which country are goods more expensive this year?
Now suppose, instead, that between last year and this year, the pound depreciated by 25%
against the euro and Germany experienced a 40% decrease in its price level (a 40%
decrease in the number of…
8. Suppose that last year, the nominal exchange rate between the Japanese yen and the British pound was ¥150.0 per £1.0, one unit of Japanese output cost ¥1300, and one unit of British output cost £8.0.a. What was the real exchange rate between the U.K. and Japan last year, expressed as the cost of British output (i.e. – the quantity of Japanese output that exchanges for 1 unit of British output)? In which country were goods more expensive last year?
Chapter 39 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Ch. 39.1 - Prob. 1QQCh. 39.1 - Prob. 2QQCh. 39.1 - Prob. 3QQCh. 39.1 - Prob. 4QQCh. 39 - Prob. 1DQCh. 39 - Prob. 2DQCh. 39 - Prob. 3DQCh. 39 - Prob. 4DQCh. 39 - Prob. 5DQCh. 39 - Prob. 6DQ
Ch. 39 - Prob. 7DQCh. 39 - Prob. 8DQCh. 39 - Prob. 9DQCh. 39 - Prob. 10DQCh. 39 - Prob. 11DQCh. 39 - Prob. 1RQCh. 39 - Prob. 2RQCh. 39 - Prob. 3RQCh. 39 - Prob. 4RQCh. 39 - Prob. 5RQCh. 39 - Prob. 6RQCh. 39 - Prob. 7RQCh. 39 - Prob. 8RQCh. 39 - Prob. 9RQCh. 39 - Prob. 10RQCh. 39 - Prob. 1PCh. 39 - Prob. 2PCh. 39 - Prob. 3PCh. 39 - Prob. 4PCh. 39 - Prob. 5P
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