Question
Suppose that a BMW costs 45,000 in Germany and that the current USD/EUR exchange rate is .80. a) Calculate the dollar price of the BMW.
Suppose that a BMW costs 45,000 in Germany and that the current USD/EUR exchange rate is.80.
a) Calculate the dollar price of the BMW.
b) Now suppose the euro appreciates relative to the dollar by 5%. What is the new USD/EUR exchange rate? What is the new dollar price of a BMW?
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Economics of Strategy
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
6th edition
978-1118273630, 111827363X, 978-1118319185
