Scribd Logo
Upload

Welcome to Scribd!

  • 302assign 3W10

    Uploaded by

    omarsalah
    4 views1 page
    The document is an economics assignment that contains two questions. The first question asks how increased demand for US baseball items in Europe following the World Baseball Classic would impact the euro-dollar nominal exchange rate in the short run, requiring a well-labeled graph in the response. The second question provides the price of a flat-screen TV in the US and Japan in US dollars and Japanese yen respectively, along with the current nominal exchange rate, and asks several sub-questions related to calculating the real exchange rate and determining which currency is undervalued or will depreciate based on purchasing power parity.

    Original Description:

    Original Title

    302Assign_3W10

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document is an economics assignment that contains two questions. The first question asks how increased demand for US baseball items in Europe following the World Baseball Classic would impact the euro-dollar nominal exchange rate in the short run, requiring a well-labeled graph in the response. The second question provides the price of a flat-screen TV in the US and Japan in US dollars and Japanese yen respectively, along with the current nominal exchange rate, and asks several sub-questions related to calculating the real exchange rate and determining which currency is undervalued or will depreciate based on purchasing power parity.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    4 views1 page

    302assign 3W10

    Uploaded by

    omarsalah
    The document is an economics assignment that contains two questions. The first question asks how increased demand for US baseball items in Europe following the World Baseball Classic would impact the euro-dollar nominal exchange rate in the short run, requiring a well-labeled graph in the response. The second question provides the price of a flat-screen TV in the US and Japan in US dollars and Japanese yen respectively, along with the current nominal exchange rate, and asks several sub-questions related to calculating the real exchange rate and determining which currency is undervalued or will depreciate based on purchasing power parity.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    ECONOMICS 302

    V. Marra
    Assignment 3 (18 points) Due Thursday Feb 4th

    1. In the aftermath of the World Baseball Classic, demand for US-produced baseball items
    skyrocketed in Europe. What impact would this have on the euro-dollar nominal exchange
    rate in the short run? Answer this question with a well-labeled graph. (6)

    2. A certain flat-screen TV costs $600 in the US and ¥50,000 (yen) in Japan. The current
    nominal exchange rate is $1 = ¥ 50,000 (or ¥1 = $.008).

    a. What is the “real” $ / ¥ exchange rate? (3)


    b. Which currency is currently undervalued according to rule of Purchasing Power Parity?
    (3)
    c. What does PPP suggest the nominal $ / ¥ exchange rate should be? (3)
    d. Given the answer to c, which currency will depreciate in the long run? (3)

    You might also like