Question
1. Consider the monetary approach to explain how the long-term exchange rate is determined, rely on algebraic equality. Analyzes the long-term impact of monetary variations,
1. Consider the monetary approach to explain how the long-term exchange rate is determined, rely on algebraic equality. Analyzes the long-term impact of monetary variations, interest rates and production levels.
2.Cite and describe the aspects that have caused the negative results from the PPP (Purchasing Power Parity) analysis.
3.Explain the decision to be made in the following situation: A tennis manufacturer in Japan receives an order in July for 20,000 pairs of tennis shoes. They demand a payment of 800,000 yen by December of the same year. The manufacturer expects that by December, the yen will rise from its current rate of $1 = Y 130 to $1 = 100. The manufacturer can borrow yen, at a rate of 6% per year.
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