Question
You are given the following information about a country whose currency is the crown: The spot exchange rate in 2000 was 22 crowns per euro.
You are given the following information about a country whose currency is the crown:
The spot exchange rate in 2000 was 22 crowns per euro.
The spot exchange rate in 2015 was 24 crowns per euro.
The bilateral real exchange rate value of the country's currency (relative to the euro) was 96 in 2000.
The bilateral real exchange rate value of the country's currency (relative to the euro) was 108 in 2015.
The country's price index was 180 in 2000 and 200 in 2015.
Is this sufficient information to determine what the crown-euro spot exchange rate should have been in 2015, so that relative PPP would have held closely during the time period 2000 to 2015?
If it is sufficient information, show your calculations to determine what the spot exchange rate should have been in 2015.
If it is not sufficient information, explain why not.
Any thoughts about how to set this up?
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