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Question 6 On 28th September 2020, the /$ exchange rate was 0.78/$ compared to 0.81/$ exactly one year before. On the same day, the $
Question 6 On 28th September 2020, the /$ exchange rate was 0.78/$ compared to 0.81/$ exactly one year before. On the same day, the $ exchange rate was 0.86/$ compared with 0.91/$ one year earlier. a) Calculate the percentage appreciation/depreciation of the pound against the dollar over the previous year. Calculate the percentage appreciation/depreciation of the euro against the dollar over the previous year. Write a concluding remark about which currency appreciated/depreciated after each final answer. (8 marks) b) Calculate the percentage appreciation or depreciation of the euro against sterling over the previous year. (5 marks) C) Review the purchasing power parity conditions (PPP). Do you believe they work? Explain. (12 marks) (Total: 25 marks)
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