Suppose that an Apple iPhone costs $180 in the United States, £65 in the United Kingdom,...
Suppose that an Apple iPhone costs $180 in the United States, £65 in the United Kingdom, and ¥35,000 in Japan. If the exchange rate between the pound and the dollar is $1.50= £1, the real exchange rate between the pound and the dollar is ______. (Enter your response rounded to two places.) If the exchange rate between the dollar and the is yen ¥120 = $1, the real exchange rate between the dollar and the yen is ________. (Enter your response rounded to two places.)
Homework Answers
RER = NER x P*/P
the real exchange rate between the pound and the dollar is = 1.5 x 65/180 = 0.54
the real exchange rate between the dollar and the yen is = 120 x 180/35000 = 0.62
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