In Munich a bratwurst costs 5 euros; a hot dog costs $4 at Boston's Fenway Park. At
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In Munich a bratwurst costs 5 euros; a hot dog costs $4 at Boston's Fenway Park. At an exchange rate of $1.50/per euro, what is the price of a bratwurst in terms of hot dogs? All else equal, how does this relative price change if the dollar appreciates to $1.25 per euro? Compared with the initial situation, has a hot dog become more or less expensive relative to a bratwurst?
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Related Book For
International Economics Theory & Policy
ISBN: 9780138002121
8th Edition
Authors: Paul R Krugman, Maurice Obstfeld
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