Suppose the price level and value of the U.S. dollar in year 1 are 1 and $1, respectively. Instructions: Enter your answers rounded to 2 decimal places. a. If the price level rises to 1.25 in year 2, what is the new value of the dollar? $______ b. If, instead, the price level falls to 0.50, what is the value of the dollar? $______
Suppose the price level and value of the U.S. dollar in year 1 are 1 and $1, respectively. Instructions: Enter your answers rounded to 2 decimal places. a. If the price level rises to 1.25 in year 2, what is the new value of the dollar? $______ b. If, instead, the price level falls to 0.50, what is the value of the dollar? $______
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
Section: Chapter Questions
Problem 23CTQ: Why would a nation dollarize—that is, adopt another countrys currency instead of having its own?
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Suppose the price level and value of the U.S. dollar in year 1 are 1 and $1, respectively.
Instructions: Enter your answers rounded to 2 decimal places.
a. If the price level rises to 1.25 in year 2, what is the new value of the dollar?
$______
b. If, instead, the price level falls to 0.50, what is the value of the dollar?
$______
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