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At a base period, the CPls of the countries of Tuolumne (currency is the TOL) and Bodee (currency is the BDE) are both 100, a

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Answer #1

real exchnage rate (BDE/TOL) nominal exchange rate (BDE)* (CPI TOL)/(CPI BDE) CPI TOL = CPI BDE = 110 105 Reall exchange rate

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