Question
6.You are a supplier of water purifiers. You have two potential buyers that both want to buy 2,000 water purifiers. The buyer in San Francisco,
6.You are a supplier of water purifiers. You have two potential buyers that both want to buy 2,000 water purifiers. The buyer in San Francisco, California offers you $5,000 for them and the buyer in Manchester, England offers you 3,800. The nominal exchange rate is $1 for 0.72.
a)What is the real exchange rate?
b)Who should you sell your 2,000 water purifiers to and why?
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Introduction to Econometrics
Authors: James H. Stock, Mark W. Watson
3rd edition
133595420, 978-0138009007, 138009007, 978-0133486872, 133486877, 978-0133595420
