a) The Japanese yen trades at 110 yen per dollar and the British pounds trade at 0.62 pounds per dollar. What is the nominal exchange rate between the yen and the pound?

b) A Japanese-made computer costs 250 000 yen and a similar British-made computer costs 1500. Given the nominal exchange rate from part a), which computer is cheaper?

c) From the perspective of the British find the real exchange rate in terms of computers. Based on the real exchange rate you found which country's computers are more competitively priced?

Answer rating: 100% (QA)

a Nominal Exchange Rate between Yen and Pound Given Japanese Yen to Dollar 110 yen per dollar Britis... View the full answer