Question
In a hypothetical world, between last year and this year, the CPI in Mexico rose from 110 to 115 and the CPI in Japan rose
In a hypothetical world, between last year and this year, the CPI in Mexico rose from 110 to 115 and the CPI in Japan rose from 85 to 95. Mexico's currency unit, the Peso(MXN), was worth 8.97(MXN) per Canadian dollar last year and is worth 8.83(MXN) per Canadian dollar this year. Japan's currency unit, the Yen(JPY), was worth 88.89(JPY) per Canadian dollar last year and is worth 88.79(JPY) per Canadian dollar this year.
a)Find the percentage change from last year to this year in Mexico'snominalexchange rate with Japan (measured as # of Pesos/1 Japan Yen).
b)Find the percentage change from last year to this year in Mexico'srealexchange rate with Japan. Again, assume that we are measuring the nominal exchange rate portion as the # of Pesos/1 Japan Yen.
c)Relative to Japan, do you expect Mexico's exports to be helped or hurt by these changes in exchange rates?
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