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Question 3. Nominal and real exchange rates (a) The table below shows the nominal exchange rate between the euro and sterling and the CPI values in Ireland and the UK over the period 2007 to 2013: Nominal exchange rate CPI (Ireland) CPI (UK) 2007 (Jan) 67p 100 103.2 2013 (Jan) 84p 105.6 121.1 (i) Write down the formula/equation for the real exchange rate. Use this equation to calculate the change in the real exchange rate (RER) between Ireland and the UK over the period 2007-2013.

Question 3. Nominal and real exchange rates (a) The table below shows the nominal exchange rate between the euro and sterling and the CPI values in Ireland and the UK over the period 2007 to 2013: Nominal exchange rate CPI (Ireland) CPI (UK) 2007 (Jan) 67p 100 103.2 2013 (Jan) 84p 105.6 121.1 (i) Write down the formula/equation for the real exchange rate. Use this equation to calculate the change in the real exchange rate (RER) between Ireland and the UK over the period 2007-2013.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Question 3. Nominal and real exchange rates (a) The table below shows the nominal exchange rate between the euro and sterling and the CPI values in Ireland and the UK over the period 2007 to 2013: Nominal exchange rate CPI (Ireland) CPI (UK) 2007 (Jan) 67p 100 103.2 2013 (Jan) 84p 105.6 121.1 (i) Write down the formula/equation for the real exchange rate. (ii) Use this equation to calculate the change in the real exchange rate (RER) between Ireland and the UK over the period 2007-2013.
Transcribed Image Text:Question 3. Nominal and real exchange rates (a) The table below shows the nominal exchange rate between the euro and sterling and the CPI values in Ireland and the UK over the period 2007 to 2013: Nominal exchange rate CPI (Ireland) CPI (UK) 2007 (Jan) 67p 100 103.2 2013 (Jan) 84p 105.6 121.1 (i) Write down the formula/equation for the real exchange rate. (ii) Use this equation to calculate the change in the real exchange rate (RER) between Ireland and the UK over the period 2007-2013.
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