January 2012, one US dollar was worth 50.0 Indian rupees. Suppose that over the next year the value of the Indian rupee ecreases to 61.0 Indian rupees to one US dollar. Suppose also that the price level of all goods and services in India, as measured in rupees, falls by 13.0%, so that the Indian price index falls from a value of 100 to 87.0. At the same time, suppose at the American price level increases by 6%, to 106. By what percentage did the value of the real exchange rate change over this period? Please give your answer to the nearest whole percentage point. change in real value of the exchange rate: TOOLS x10 As a result of the changes, America's consumption of Indian goods and services will likely increase. As a result of the changes, India's consumption of American goods and services will likely decrease. % + O

January 2012, one US dollar was worth 50.0 Indian rupees. Suppose that over the next year the value of the Indian rupee ecreases to 61.0 Indian rupees to one US dollar. Suppose also that the price level of all goods and services in India, as measured in rupees, falls by 13.0%, so that the Indian price index falls from a value of 100 to 87.0. At the same time, suppose at the American price level increases by 6%, to 106. By what percentage did the value of the real exchange rate change over this period? Please give your answer to the nearest whole percentage point. change in real value of the exchange rate: TOOLS x10 As a result of the changes, America's consumption of Indian goods and services will likely increase. As a result of the changes, India's consumption of American goods and services will likely decrease. % + O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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