Question
1. A basket of goods costs $3,850 in the U.S. Exact same goods basket costs 3,100 in Europe. The exchange rate is $1.26/ A. What
1. A basket of goods costs $3,850 in the U.S. Exact same goods basket costs 3,100 in Europe. The exchange rate is $1.26/
A. What is the over/undervaluation of the USD? (percent)
B. What is the over/undervaluation of the ? (percent)
2. Regarding Q1, how much cheaper/more expensive is the U.S. basket than the European basket? (in percentage terms)
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Finance Of International Trade
Authors: Eric Bishop
1st Edition
0750659084, 978-0750659086
