Exchange rate between the dollar and the euro, International Economics

Assignment Help:

Q. What is the real exchange rate between the dollar and the euro equal to?

Answer: Let actual dollar/euro exchange rate q$/ENominal exchange rate E$/EPrice of an unchanging basket in US PUS Price of an unchanging basket in Europe PE Then q$/E = E$/E PE / PUS. A boost in the real dollar/euro exchange rate is called as a real depreciation of the dollar beside the euro a decrease in purchasing power of the dollar.

A diminish in the real dollar/euro exchange rate is called as a real appreciation of the dollar beside the euro a increase in purchasing power of the dollar.


Related Discussions:- Exchange rate between the dollar and the euro

Is a depreciation of the dollar/euro exchange rate, Is a depreciation of th...

Is a depreciation of the dollar/euro exchange rate correlated with a decrease in the dollar return on U.S. deposits? Answer:  No, suppose that the Interest Parity is maintained

Explain why price levels are lower in poorer countries, Q. Explain wh...

Q. Explain why price levels are lower in poorer countries. Answer: One theory explicate the difference in prices on different endowments of capital and employment Bhagw

Analyze effects of an increase in the european money supply, Q. Analyze the...

Q. Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate. Answer: The major points are: A raise in the European money supply will re

International trade, What does the factor proportions theory posits

What does the factor proportions theory posits

Effects of a permanent increase in the u.s. money supply, Q. Explain the ef...

Q. Explain the effects of a permanent increase in the U.S. money supply in the short run and in the long run. Assume that the U.S. real national income is constant. A raise in

Positive scale economies, Q . Is it possible that if positive scale econom...

Q . Is it possible that if positive scale economies characterize an industry, that its equilibrium can be consistent with purely competitive conditions? Explain how this would hap

Ppp, what is ppp

what is ppp

NET BARTER TERMS OF TRADE OR COMMODITY TERMS OF TRADE, TERMS OF TRADE MEAN...

TERMS OF TRADE MEANING AND NET BARTER TERMS OF TRADE MEANING TABLE DIAGRAM

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