Evaluate exchange rate against the russian ruble, International Economics

Assignment Help:

Q. Suppose Russia's inflation rate is 200% over one year, but the inflation rate in Switzerland is only 2%. According to relative PPP, what should happen over the year to the Swiss franc's exchange rate against the Russian ruble?

Answer: The exchange rate among the rubble and the franc at time t - The same exchange rate at time t-1 the exchange rate among the rubble and the franc at time t = 2 - 0.02 =1.98.

Thus there will be a 198% depreciation of the ruble alongside the franc otherwise, conversely a198% appreciation of the franc against the ruble.


Related Discussions:- Evaluate exchange rate against the russian ruble

Germanys economic welfare, Q. At the conclusion of World War I, Germany, a...

Q. At the conclusion of World War I, Germany, as a punishment, was obliged to take a large transfer to France in the form of reparations. Is it possible that the actual reparation

Nature and basis of international trade, discus how every economy is essent...

discus how every economy is essentially part of the international economy

Economics, describe the U.S role in the world economy

describe the U.S role in the world economy

Ricardos classic demonstration of the effects and sources, Q. It is argued...

Q. It is argued that the United States could be foolish to maintain a free-trade stance in a world in which all other countries exploit prisoner or child labor, or are protectioni

report on internationally competing firms , Investment analysis report on ...

Investment analysis report on internationally competing firms Students will be organized randomly into small groups (typically 6), and will prepare an investment analysis of c

Explain why relative ppp is useful, Q. Explain why Relative PPP is useful w...

Q. Explain why Relative PPP is useful when comparing countries that base their price levels on different product baskets. Answer: For instance If the U.S price level increase

Export finance, role of export import bank of india

role of export import bank of india

Trams of trade, different between her barter terms of trade and net barter ...

different between her barter terms of trade and net barter terms of trade

Explain demand for money, Q. Explain why one can write the demand for money...

Q. Explain why one can write the demand for money as follows: Md = P L (R, Y) Answer: The collective money demand is proportional to the price level. Imagine that every prices

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd