Which one of the following formulas correctly describes the relative purchasing power parity relationship? A. E(St)...
Which one of the following formulas correctly describes the relative purchasing power parity relationship?
A. E(St) = S0[1 + (hFC - hUS) t
b. E(St) = S0[1 - (hFC - hUS)t
c. E(St) = S0[1 + (hUS+ hFC)t
d. E(St) = S0[1 - (hUS - hFC)t
e. E(St) = S0[1 + (hUS - hFC)t
Homework Answers
The correct answer is option A,
- E(St) = S0[1 + (hFC - hUS) t
SO = current (time 0) spot exchange rate (foreign currency per dollar)
E(St) = expected exchange rate in r periods
hus =inflation rate in the united states
hfc =foreign currency inflation rate
- under this theory which predicts a relationship between the inflation rates of two countries over a specified period and the movement in the exchange rate between their two currencies over the same period.
- it says that the expected percentage change in the exchange rate is equal to the difference in the inflation rate .
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Which one of the following formulas correctly describes the
relative purchasing power parity relationship?
A. E(St)...
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QUESTION TWO a) What is the difference between Absolute Purchasing Power Parity (APPP) and Relative Purchasing Power Parity (RPPP)? (5 Marks) b) Consider a world that only co mprises 3 goods (Good 1, Good 2, Good 3) and 2 countries (Fra nce and Japan). A (0.50, 0.25,0.25). ssume that consumption weights of these goods for both countries be The price of the goods at time t are listed below- France EUR) Japan(Yen) 20 40 80 60 Good 1 Good 2...
2. What is relative purchasing power parity? Assuming relative PPP holds, fill in the table below:...
2. What is relative purchasing power parity? Assuming relative PPP holds, fill in the table below: Π US, t 0.03 0.04 S/E, t S/E, t-1 E, t -0.0811 0.01 0.002381 0.014545 0.026522 2.1 2.1 2.2 2.2 0.06 0.07 0.08 2.4 2.5 2.7 2.9 2.4 2.6 2.7 2.8 0.05 0.061538 0.072963 0.084286 0.1 0.11 0.13
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If K> 1, which of the following statements correctly describes E°? E>0 Under which of the...
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Which of the following statements correctly describes the relationship between the resistance of a resistor and its physical volume? Select one: a. Resistance always decreases with increasing volume b. Resistance always increases with increasing volume c. Resistance always remains constant with increasing volume d. Resistance may decrease or increase depending on whether the area or length is increasing respectively A carbon composition variable resistor may become electrically noisy due to: Select one: a. High humidity b. Low humidity c. Mechanical...
please provide helpful answers for both questions posted. Thank you absolute purchasing power parity, what should...
please provide helpful answers for both questions
posted.
Thank you
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According to the Purchasing Power Parity Theorem and the Quantity Theory of Money, other things being...
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2. What is relative purchasing power parity? Assuming relative PPP holds, fill in the table below: Π US, t 0.03 0.04 S/E, t S/E, t-1 E, t -0.0811 0.01 0.002381 0.014545 0.026522 2.1 2.1 2.2 2.2 0.06 0.07 0.08 2.4 2.5 2.7 2.9 2.4 2.6 2.7 2.8 0.05 0.061538 0.072963 0.084286 0.1 0.11 0.13
21. Which of the following vector equations correctly describes the relationship among the vectors shown in the figure below? A. A+ B-C-0 B. A-B+C=0 C. A-B-C=0 D. A+B+C=0 E. None of these equations are correct.
If K> 1, which of the following statements correctly describes E°? E>0 Under which of the following situations does E E o2 A When Q<1 B When Q>1 C When Q<0 D WhenQ 1
Which of the following statements correctly describes the relationship between the resistance of a resistor and its physical volume? Select one: a. Resistance always decreases with increasing volume b. Resistance always increases with increasing volume c. Resistance always remains constant with increasing volume d. Resistance may decrease or increase depending on whether the area or length is increasing respectively A carbon composition variable resistor may become electrically noisy due to: Select one: a. High humidity b. Low humidity c. Mechanical...
please provide helpful answers for both questions
posted.
Thank you
absolute purchasing power parity, what should an identical A. $374.24 B. $387.05 C. $361.95 D. $388.52 E. $339.90 18. Assume you can currently exchange $100 for 780.25. The inflation rate in Europe is expected to be 1.8 percent as compared to 2.4 percent in the U.S. Based on relative purchasing power parity, what should the exchange rate be four years from now? A. €.8219/$1 B. €.8014/$1 C. €.7970/$1 D. €.8073/$1...
In the country of Poor, GDP per capita at purchasing power parity is $40.000. In the country of Rich GDP per capita at purchasing power party is $60,000. What is NOT a reason someone might want to live in Poor instead of Rich? Select one: O a. It's possible that in the country of Rich, a few people have most of the money. If that was true, then most people might actually be ablevo buy more goods and services in...
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