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You have been given the following data on nominal exchange rates and price levels in the USA, Russia, Germany and Argentina. Calculate the real exchange
You have been given the following data on nominal exchange rates and price levels in the USA, Russia, Germany and Argentina. Calculate the real exchange rates (foreign country's point of view) the purchasing power parity (PPP) equilibrium nominal exchange rates for Russia, Germany and Argentina relative to the USA and state whether each country's nominal exchange rate over or undervalued. Place answers in the space provided. Country S(USD/for.cur) USA Russia Germany Argentina Price Level 100 0.02 USDs per RUB 1500 1.15 USDs per EUR 115 0.06 USDs per ARS 1000 1 USDs What is the PPP nominal equilibrium exchange rate? (from the foreign country point of viewof the Foreign Currency What is the Real Exchange Rate? Is the Foreign Currency Overvalued (ie. where efforeian country-1)or Undervalued? i.e, Efforeign country) Russia Germany Argenting
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