Question
Given you have 20 units of foreign goods, the nominal exchange rate is 30, the domestic price level is 15, and the foreign price
Given you have 20 units of foreign goods, the nominal exchange rate is 30, the domestic price level is 15, and the foreign price level is 1.5. Please answer following questions. 1. By these 20 units of foreign goods, how many units of foreign currency you can get? 2. Based on question 1, please compute the amount of domestic currency you can get by these 20 units of foreign goods 3. Based on question 2, please compute the amount of domestic goods you can get by these 20 units of foreign goods 4. Based on question 3, what's the real exchange rate?
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Income Tax Fundamentals 2013
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