Suppose the demand for dollars (in exchange for euro) is given by the equation: D=240 +0.015 Y-550 rFor750r- 30 om The supply of dollars is given by S-60 + 0.026 Y 340 r -600 r+ 22 m Suppose output and the real interest rate in the domestic country and the foreign country are: Y=8,500, Y 11,000, r=0.060.r0.040. Calculate the equilbrium value of the nominal exchange rate. (in your calculations, cary out your intermediate steps to three decimals and round your answer to three decimals). 3.258 Suppose a productivity shock in the foreign country changes output in the foreign economy to 10,500. Calculate the new equilibrium value of the nominal exchange rate. (In your calculations, carry out your intermediate steps to three decimals and round your answer to three decimals)

Suppose the demand for dollars (in exchange for euro) is given by the equation: D=240 +0.015 Y-550 rFor750r- 30 om The supply of dollars is given by S-60 + 0.026 Y 340 r -600 r+ 22 m Suppose output and the real interest rate in the domestic country and the foreign country are: Y=8,500, Y 11,000, r=0.060.r0.040. Calculate the equilbrium value of the nominal exchange rate. (in your calculations, cary out your intermediate steps to three decimals and round your answer to three decimals). 3.258 Suppose a productivity shock in the foreign country changes output in the foreign economy to 10,500. Calculate the new equilibrium value of the nominal exchange rate. (In your calculations, carry out your intermediate steps to three decimals and round your answer to three decimals)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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