Question: 37 Let be inflation rate and e f be a percent change in the value of the foreign currency relative to the dollar. According to
37 Let be inflation rate and ef be a percent change in the value of the foreign currency relative to the dollar. According to the text, an equation of the real dollar/euro exchange rate (q) is:
| q = (1 + )/[(1 + $)(1 + ef)] | ||
| q = (1 + $)/[(1 + )(1 + ef)] | ||
| q = (1 + $)(1 + ef)/(1 + ) | ||
| q = (1 + )(1 + ef)/(1 + $) |
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