Suppose a computer costs $500 in the United States. Assume Brazil is home. Looking at the actual prices, does the PPP hold between U.S. and Brazil? If PPP were to hold at the nominal exchange rate provided, what would be the price of a computer in Brazil? 

 

Suppose a computer costs $500 in the United States. Assume the U.S. is home. With the price of the computer given in local currency in India, is the Indian rupee overvalued or undervalued? By how much (in percent)?

 

Use the table  and the long-run exchange rate determination model. 

If you were to predict the future $ per euro exchange rate, what would the expected exchange rate be? 

If the Federal Reserve wants the dollar to depreciate against the euro in the long run, what monetary policy should they implement to ensure that?

Use the below table to answer the following questions: Country Exchange rate per dollar South Africa (rand) Brazil (real) India (rupee) Mexico (peso) 8 2.2 45 10 Price in local currency 3,500 1,200 18,000 6,000