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Macroeconomics 11th Edition by Stephen Slavin
Edition 11ISBN: 978-0077641559Macroeconomics 11th Edition by Stephen Slavin
Edition 11ISBN: 978-0077641559 Exercise 7
Use the exchange rates listed in Figure 6 to find how much it would cost in the currency specified to make the purchases listed in problems 5 through 8.
F igure 6
Exchange Rates: Foreign Currency per American Dollar, January 12, 2013
How many Mexican pesos would you get for a dollar? You would get 12.2 pesos. Can you figure out how many dollars (actually how many cents) you would get for a peso? You would get 8.2 cents. Exchange rates fluctuate from minute to minute, and they are usually calibrated to hundredths, or even thousandths of a cent.
Source: The Federal Reserve, www.federalreserve.gov.
If you could buy a market basket of goods and services in the United States for $1,000 and those same goods and services cost you $1,200 after you converted your dollars into euros: (a) Is the euro undervalued or overvalued relative to the dollar? (b) By what percentage?
F igure 6
Exchange Rates: Foreign Currency per American Dollar, January 12, 2013
How many Mexican pesos would you get for a dollar? You would get 12.2 pesos. Can you figure out how many dollars (actually how many cents) you would get for a peso? You would get 8.2 cents. Exchange rates fluctuate from minute to minute, and they are usually calibrated to hundredths, or even thousandths of a cent.
Source: The Federal Reserve, www.federalreserve.gov.
If you could buy a market basket of goods and services in the United States for $1,000 and those same goods and services cost you $1,200 after you converted your dollars into euros: (a) Is the euro undervalued or overvalued relative to the dollar? (b) By what percentage?
Explanation
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Exchange Rate :
Exchange rate can be def...
Macroeconomics 11th Edition by Stephen Slavin
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