In: Economics
Between last year and this year, the CPI in Blueland rose from
100 to 115 and the CPI in Redland rose from 100 to 110. Blueland’s
currency unit, the blue, was worth $0.90 (U.S.) last year and is
worth $0.75 (U.S.) this year. Redland’s currency unit, the red, was
worth $0.60 (U.S.) last year and is worth $0.50 (U.S.) this year.
Consider Blueland as the home country.
a. Calculate Blueland’s nominal exchange rate with Redland
last year.
Instructions: Enter your response rounded to one
decimal place.
red/blue.
b. Calculate Blueland’s nominal exchange rate with Redland
this year.
Instructions: Enter your response rounded to one
decimal place.
red/blue.
c. Calculate the percentage change in Blueland’s nominal exchange
rate from last year to this year.
Instructions: Enter your response as an integer
value. Be certain to enter "0" if required.
%.
d. Calculate Blueland’s real exchange rate with Redland
last year.
Instructions: Enter your response rounded to one
decimal place.
red/blue.
e. Calculate Blueland’s real exchange rate with Redland
this year.
Instructions: Enter your response rounded to three
decimal places.
red/blue.
f. Calculate the percentage change in Blueland’s real exchange rate
with Redland.
Instructions: Enter your response rounded to three
decimal places.
%.
g. Relative to Redland, you expect Blueland’s exports to be (Click
to select)helpedhurtunaffected by these changes in exchange
rates.