Ans. 14
Reason :
China's inflation rate is 17.7% while Vietnam's inflation rate is 30.0%. If the Chinese real exchange...
China's inflation rate is 17.1% while Vietnam's inflation rate is 2.6%. If the Chinese real exchange rate increased by 7.2%, what is the estimated change in the nominal exchange rate (in China's perspective)? Round to the nearest two decimal place.
Assume that the expected inflation of India is 6 percent while the expected inflation in United Kingdom is 3 percent. Suppose that international capital flows equalize the real interest rates in the two countries and that purchasing- power parity holds so that the nominal exchange rate remains the same. Taking India's perspective, what is the expected change (as a number in percentage terms) in the real exchange rate between the British Pound and the Indian Rupee? Give your answer as...
Assume that the expected inflation of India is 8 percent while the expected inflation in United Kingdom is 2 percent. Suppose that international capital flows equalize the real interest rates in the two countries and that purchasing-power parity holds so that the nominal exchange rate remains the same. Taking India's perspective, what is the expected change (as a number in percentage terms) in the real exchange rate between the British Pound and the Indian Rupee? Give your answer as a...
Suppose the real exchange rate is 10, the domestic price level is 8, and the foreign price level is 4. What is the nominal exchange rate? (3%) a. Suppose the real exchange rate rises by 10%, the inflation rate in the domestic b. country is 6%, and the inflation rate in the foreign country is 4%. By what percentage does the nominal exchange rate change? (3%) Suppose the nominal exchange rate rises by 5%, the real exchange rate rises by...
2. The percentage change in the nominal exchange rate equals the percentage change in the real exchange rate plus the: A) foreign inflation rate minus the domestic inflation rate. B) domestic inflation rate minus the foreign inflation rate. C) foreign exchange rate minus the domestic exchange rate. D) domestic interest rate minus the foreign interest rate.
Inflation, nominal interest rates, and real rates. The minister of finance for the State of Tranquility has just estimated the expected inflation rate for the coming year at 6.59%. If the real rate for the coming year is 4.32%, what should the nominal interest rates at the central bank of the State of Tranquility be for the coming year? Use the approximate nominal interest rate equation and the true nominal interest rate equation to determine the rates. Using the approximate...
Let S = 0.90, the current exchange rate $ / €, P = 3 € the price level of goods in the domestic economy denominated in the currency of the country, P * = 2 $ the price level of the foreign economy in the currency of that country . (i) Find the real exchange rate in terms of foreign product units per domestic product unit. ii) If the domestic price level rises by 3% while the foreign one does...
nominal rate of interest The expected inflation rate is 6.6% and the real rate is 5.0%. Including the Fisher effect, the nominal rate of interest is __%. Round your answer to two decimal places.
Homework: Ch. 8.3: Real v. Nominal GDP Score: 2 of 4 pts Concept: Inflation Rate The following table gives nominal and real GDP for an economy for two years Nominal GOP Real GOP Year 1 1430.0 1,300 Year 2 1820.0 1560.0 Based on the table, in Year 2, the value of the GDP deflator is 116.7. (Round your answer to one decimal place.) The inflation rate between Year 1 and Year 2 is (Round your answer to one deimal place)...
The real risk-free rate is 4%. Inflation is expected to be 2% this year, 4% next year, and then 5.5% thereafter. The maturity risk premium is estimated to be 0.0007 x (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security? Round your answer to two decimal places. %