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Suppose that initially e = $2.0, where e is the price of a Jamaican Dollar in terms of Guyana Dollars. Jamaica's CPI (CP IJ )
Suppose that initially e = $2.0, where e is the price of a Jamaican Dollar in terms of Guyana Dollars. Jamaica's CPI (CP IJ ) is 150 and Guyana's CPI (CP IG) is 300. For each scenario below say whether the value of the real exchange rate () appreciates, depreciates or remains unchanged, vis-a-vis the initial values given above. (a) e = $2.2 and CP IG = 330 (b) CP IJ = 20
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