c. Indicate whether the currencies have appreciated, depreciated, or remained unchanged, against the US dollar in real term. i. FRA: O Appreciated O Depreciated O
c. Indicate whether the currencies have appreciated, depreciated, or remained unchanged, against the US dollar in real term. i. FRA: O Appreciated O Depreciated O Remained unchanged ii. JPN: O Appreciated O Depreciated O Remained unchanged The following table shows the nominal and real exchange rates for two countries and two years (OECD, 2020a,b). The column names are the country codes (not the currency codes) and the exchange rates are expressed as the amount of the currency per unit of US dollar. Nominal Real Year FRA JPN FRA JPN 1972 0.7690 303.1725 1.1355 1.3352 2008 0.6799 103.3595 0.7710 0.8846 e. Answer this question for FRA. Ifwe believe in the theory of purchasing power parity, what is likely to happen after 2008? i. Indicate whether the currency of FRA will appreciate, depreciate, or remain unchanged, against the US dollar in nominal term. 0 Appreciate O Depreciate O Remain unchanged ii. Indicate whether the currency of FRA will appreciate, depreciate, or remain unchanged, against the US dollar in real term. 0 Appreciate O Depreciate O Remain unchanged iii. Which of the following statements are correct? 0 The price level in FRA will increase faster than the price level in the United States. 0 The price level in the United States will increase faster than the price level in FRA. O The price level in the United States will remain the same as the the price level in FRA
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