1. – Using the following information, determine each one of the theoretical Exchange Rates (E.R.) for December of year 02 according to the Relative PPP Theory. ΜARKET MARKET E.R. E.R. COUNTRY CURRENCY CPI CPI Dec-01 Dec-02 Dec-01 Dec-02 Mexico МХР 231.89 264.3546 19.56 20.15 Turkey TRY (Lira) 498 527.88 5.9419 6.07673 Australia AUD 989 1038.45 1.7759 1.81183 Japan JPY 678 745.8 105.866 113.978 United Kingdom GBP 905.26 986.7334 0.5991 0.617849 South Korea KRW (Won) 795.4 874.94 1,658.62 1,793.37 Canada CAD 523.12 554.5072 1.3736 1.4942 U.S.A. USD 1.5 1.56
1. – Using the following information, determine each one of the theoretical Exchange Rates (E.R.) for December of year 02 according to the Relative PPP Theory. ΜARKET MARKET E.R. E.R. COUNTRY CURRENCY CPI CPI Dec-01 Dec-02 Dec-01 Dec-02 Mexico МХР 231.89 264.3546 19.56 20.15 Turkey TRY (Lira) 498 527.88 5.9419 6.07673 Australia AUD 989 1038.45 1.7759 1.81183 Japan JPY 678 745.8 105.866 113.978 United Kingdom GBP 905.26 986.7334 0.5991 0.617849 South Korea KRW (Won) 795.4 874.94 1,658.62 1,793.37 Canada CAD 523.12 554.5072 1.3736 1.4942 U.S.A. USD 1.5 1.56
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. – Using the following information, determine each one of the theoretical Exchange Rates
(E.R.) for December of year 02 according to the Relative PPP Theory.
ΜARKET
MARKEΤ
E.R.
E.R.
COUNTRY
CURRENCY
CPI
CPI
Dec-01
Dec-02
Dec-01
Dec-02
Mexico
MXP
231.89
264.3546
19.56
20.15
Turkey
TRY (Lira)
498
527.88
5.9419
6.07673
Australia
AUD
989
1038.45
1.7759
1.81183
Jaрan
JPY
678
745.8
105.866
113.978
United
GBP
905.26
986.7334
0.5991
0.617849
Kingdom
South Korea
KRW (Won)
795.4
874.94
1,658.62
1,793.37
Canada
CAD
523.12
554.5072
1.3736
1.4942
U.S.A.
USD
1.5
1.56
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