Principles of Macroeconomics, Loose-Leaf Version
8th Edition
ISBN: 9781337096881
Author: Mankiw, N. Gregory
Publisher: South-Western College Pub
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Chapter 6, Problem 2CQQ
To determine
The impact of increased price ceiling on the economy.
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Florin and Guilder are two countries separated by a narrow sea. They use currencies called, respectively, the Flop and the Gulp.
Suppose the nominal exchange rate is 20 Flops per Gulp.
A Guilderian trader buys a 120 Flop barrel of Florish pickles by exchanging 6 Gulps, and a Florish trader buys a 4 Gulp crate of Guilderian apples by exchanging 80 Flops.
Then the Gulp depreciates to 10 Flops per Gulp.
Instructions: Enter your answers as whole numbers.
How much must the Guilderian pay for the same 120 Flop barrel of pickles?
Gulps
How much must the Florish trader pay for the same 4 Gulp crate of apples?
Flops
Suppose the nominal exchange rate is 5 Flops per Gulp.
A Guilderian trader buys a 40 Flop barrel of Florish pickles by exchanging 8 Gulps, and a Florish trader buys a 10 Gulp crate of Guilderian apples by exchanging 50 Flops.
Then the Gulp appreciates to 10 Flops per Gulp.
What price must the Guilderian pay for the same 40 Flop barrel of pickles?
Gulps
How much must the Florish trader pay for the same 10 Gulp crate of apples?
Flops
Suppose the nominal exchange rate is 0.25 Flops per Gulp.
A Guilderian trader wants to buy a barrel of Florish turnips for 20 Flops.
How many Gulps must he convert to get that many Flops?
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Principles of Macroeconomics, Loose-Leaf Version
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