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Suppose that the current spot exchange rate between the U.S. dollar and the British pound is $1.30000/. Suppose also that the price level of a
Suppose that the current spot exchange rate between the U.S. dollar and the British pound is $1.30000/. Suppose also that the price level of a typical consumption basket in the United Kingdom is 110/CB and the price level of a typical consumption basket in the United States is $100/$CB. Suppose that the level of the typical consumption basket in the United Kingdom becomes 120.12/CB and the level of a typical consumption basket in the United States becomes $100/$CB one year from now. If the spot exchange rate is $1.2500/ one year from now, how much is the percentage real appreciation/depreciation of the British pound during the year? Round your answer to the nearest integer. Suppose that the current spot exchange rate between the U.S. dollar and the British pound is $1.30000/. Suppose also that the price level of a typical consumption basket in the United Kingdom is 110/CB and the price level of a typical consumption basket in the United States is $100/$CB. Suppose that the level of the typical consumption basket in the United Kingdom becomes 120.12/CB and the level of a typical consumption basket in the United States becomes $100/$CB one year from now. If the spot exchange rate is $1.2500/ one year from now, how much is the percentage real appreciation/depreciation of the British pound during the year? Round your answer to the nearest integer
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