3. The nominal exchange rate is e=48 peso per USD. The price of a Big Mac is P=$3 in the U.S., and is P*= 72 pesos in Philippine. Required: a) What is the price of a U.S Big Mac measured in pesos? b) Calculate the real exchange rate measured as Filipino Big Mac per U.S. Big Mac?
3. The nominal exchange rate is e=48 peso per USD. The price of a Big Mac is P=$3 in the U.S., and is P*= 72 pesos in Philippine. Required: a) What is the price of a U.S Big Mac measured in pesos? b) Calculate the real exchange rate measured as Filipino Big Mac per U.S. Big Mac?
Chapter29: International Finance
Section: Chapter Questions
Problem 8P
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Question
![3. The nominal exchange rate is e=48 peso per USD. The
price of a Big Mac is P=$3 in the U.S., and is P*= 72
pesos in Philippine.
Required:
a) What is the price of a U.S Big Mac measured in pesos?
b) Calculate the real exchange rate measured as Filipino Big
Mac per U.S. Big Mac?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2efa3fda-4990-41ca-9d14-f2f80a733462%2F3306aaba-83f1-44b4-b563-f8b5486b3908%2F1k0a3wl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. The nominal exchange rate is e=48 peso per USD. The
price of a Big Mac is P=$3 in the U.S., and is P*= 72
pesos in Philippine.
Required:
a) What is the price of a U.S Big Mac measured in pesos?
b) Calculate the real exchange rate measured as Filipino Big
Mac per U.S. Big Mac?
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