Question
Two identical items are manufactured in both Australia and the USA. Using your knowledge of the purchasing power parity theory and the following data, forecast
Two identical items are manufactured in both Australia and the USA. Using your knowledge of the purchasing power parity theory and the following data, forecast the AUD/USD exchange rate in years 2 and 3.
| Price (AUD) | Price (USD) | AUD/USD | |
|---|---|---|---|
| Year 1 | $17.50 | $13.60 | 0.7680 |
| Year 2 | $19.25 | $14.28 | ? |
| Year 3 | $19.25 | $14.99 | ? |
Multiple Choice
-
0.7296 and 0.7661
-
0.8448 and 0.8870
-
0.8064 and 0.8467
-
0.8064 and 0.7661
NO.30
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Understanding The Finance Of Welfare
Authors: Howard Glennerster
2nd Edition
1847421091, 978-1847421098
