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Only respond id you can answer both questions!!! Suppose a bottle of wine costs 20 euros in France and 25 dollars in the United States.
Only respond id you can answer both questions!!!
Suppose a bottle of wine costs 20 euros in France and 25 dollars in the United States. If the nominal exchange rate is .80 euros per dollar, what is the real exchange rate? If we start with the same scenario as before: a bottle of wine costs 20 euros in France and 25 dollars in the United State, nominal exchange rate is.80 euros/dollar, but then the EU decides to increase the money supply, causing prices to increase and the price of a bottle of wine increases to 30 euros. What does the new nominal exchange rate have to be in order for purchasing power parity to hold Step by Step Solution
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