Problem 1: a) The nominal exchange rate E¥/$= 200/250 =0.8 b) The nominal exchange rate E$/¥= 250/200 =1.25 c) a) For 1 dollar spent on goods in US , it will take $0.8 spent on same goods in china b) For 1 ¥ spent on goods in china, it will take $1.25spent on same goods in US. Problem 2 a) The expected percentage change in E¥/$= 2/3.5=0.6% b) The expected percentage change in E$/¥= 3.5/2=1.

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Answered 1 days After Apr 27, 2021

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Komalavalli answered on Apr 29 2021

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Problem 1:
a)
The nominal exchange rate E¥/$= 200/250 =0.8
)
The nominal exchange rate E$/¥= 250/200 =1.25
c)
a) For 1 dollar spent on goods in US , it will take $0.8 spent on same goods in china
) For 1 ¥ spent on goods in china, it will take $1.25spent on same goods in US.
Problem 2
a)
The expected percentage change in E¥/$= 2/3.5=0.6%
)
The expected percentage change in E$/¥= 3.5/2=1.75%
c)
The...

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