Suppose a Japanese car costs 150,000 yen, a similar American car costs $25,000, and a dollar can buy 80 yen. (a) What is
Posted: Thu May 19, 2022 9:16 am
Suppose a Japanese car costs 150,000 yen, a similar American car costs $25,000, and a dollar can buy 80 yen.
(a) What is the nominal exchange rate?
(b) What is the real exchange rate?
(c) Based on your answers above, does the purchasing-power-parity hold? Explain why or why not.
(a) What is the nominal exchange rate?
(b) What is the real exchange rate?
(c) Based on your answers above, does the purchasing-power-parity hold? Explain why or why not.