1. Somebody has bought US Dollar with two-third of his money and Euro with one-third. Dollar has gained value over national currency by1,4% each month and Euro1,6% each month. The average monthly inflation rate is 2. Find the percentage loss of him/her at the end of a year.
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- Somebody has bought US Dollar with two-third of his money and Euro with one-third. Dollar has gained value overnational currency by 1.8 % each month and Euro 1.2 % each month. The average monthly inflation rate is 3. Find thepercentage loss of him/her at the end of a year.Discuss Fiat, Seingiorage and Petro Dollar1. a) Is the following graph about the "Purchasing Power of the Diminishing Dollar" misleading? Why or why not? GELİNAARADICS ANKAPILA 1998-ESENHOWR$1.00 WERNER FALT THE END OF AMERICA ELEMEN 5-% JUVE SANA 1993-MINNE94 THE EMERS Purchasing Power of the Diminishing Dollar 1968-JOHNSON 1973-MXON M 1978-CARTER A b) Provide a time-series graph that accurately reflects the data: [(1978- Carter, $0.44), (1973- Nixon, $0.64), (1968- Johnson, $0.83), (1963- Kennedy, $0.96), (1958-Eisenhower, $1.00).
- A South American country has had a high rate of inflation. Recently, its exchange rate was 15 cruzados per dollar; that is, one dollar will buy 15 cruzados. It is likely that the country will continue to experience a 25% inflation rate and that the U.S. will continue at a 3% inflation rate. Assume that the exchange rate will vary the same as the inflation. In this situation, one dollar will buy how many cruzados 5 years from now?What is the value of year 4's output in nominal dollars?Assume that the export price of a Sony Smartphone from Naguya, Japan is VIS. The exchange rate is 87.60S. The forecast rate of inflation in the United States is 22% per year and is 1,5% per year in Japan. Use this data to answer the following questions on exchange rate pass through. a. What was the export price for the Sony Smartphone at the begianing of the year expressed in U.S. dollars? b. Assuming purchasing power parity holds, what should the exchange rate be at the end of the year? e. Assuming 100% pass-through of exehange rate, what will the dollar price of a Sony Smartphone be at the end of the year? nini d. Assuming 80% pass-through, what will the dollar price of a Sony Smartphone be at the end of the year?
- 6) The value of 100 South Korean Won (KRW) against the Japanese Yen (JPY) rose from9.7730 in May 2014 to 11.1710 on May 1, 2015. What was the percentage change inits value?Quantitative Problem: In the spot market, 3.62 Brazilian reals can be exchanged for 1 U.S. dollar. An Apple iPad Air costs $550 in the United States. If purchasing power parity (PPP) holds, what should be the price of the same iPad Air in Brazil? Do not round intermediate calculations. Round your answer to the nearest whole number. realsIn Brazil, a country that underwent a rapid inflationbefore 1994, many transactions were conducted in dollars rather than in reals, the domestic currency. Why?
- AE Ap Ap suggests that p where E is domestic price of one unit of foreign currency (e.g., Rs100 = $1) Q.23 Purchasing power parity which can be written as A. The home currency will appreciate if the current home inflation exceeds the current foreign inflation rate. B. The home currency will appreciate if the current foreign inflation rate exceeds the current domestic inflation rate. C. The home currency will depreciate if the current home interest rate exceeds the current Foreign interest rate D. The home currency will depreciate if the current home inflation rate exceeds the current foreign interest rate. E. Both B and D are correct.currency Y depreciate against USD by _________% Let’s say currency Y used to be at 1=$1 USD on fixed peg, now it changed to 1.25 = $1USD, how much has currency X depreciate?Over the last 10 years, the average rate of inflation has been 1.51%. What is the purchasing power of a dollar today in terms of what a peso could purchase in 2012?