In this question, you will test relative purchasing parity (PPP) using the data. Use yearly data from FRED website from 1971 to 2020: (i) The Canadian Dollars to U.S. Dollar Spot Exchange Rate (ER) (ii) Consumer price index for Canada (CAN_CPI), and (iii) Consumer price index for the US (US_CPI). Inflation is measured by the consumer price index (CPI). The relative PPP equation is: AE CAN$/US$ ECAN$/US$ = π CAN - πUS Submit the Excel sheet that you worked on. 1. First, compute the percentage change in the exchange rate (left-hand side of the equation). Caculate the variable for each year from 1972 to 2020 in Column E (named Change_ER) of the Excel sheet. For example, for 1972, compute E3: (B3-B2)/B2). ER1972 ER1971 ER 1971 (in Excel, the formula in cell

In this question, you will test relative purchasing parity (PPP) using the data. Use yearly data from FRED website from 1971 to 2020: (i) The Canadian Dollars to U.S. Dollar Spot Exchange Rate (ER) (ii) Consumer price index for Canada (CAN_CPI), and (iii) Consumer price index for the US (US_CPI). Inflation is measured by the consumer price index (CPI). The relative PPP equation is: AE CAN$/US$ ECAN$/US$ = π CAN - πUS Submit the Excel sheet that you worked on. 1. First, compute the percentage change in the exchange rate (left-hand side of the equation). Caculate the variable for each year from 1972 to 2020 in Column E (named Change_ER) of the Excel sheet. For example, for 1972, compute E3: (B3-B2)/B2). ER1972 ER1971 ER 1971 (in Excel, the formula in cell

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter8: Economic Fluctuations, Unemployment, And Inflation

Section: Chapter Questions

Problem 12CQ

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