Question: Assume that the absolute purchasing power parity holds between two nations. US and France A basket produced in the U.S is sold in the U.S

Assume that the absolute purchasing power parity holds between two nations. US and France

A basket produced in the U.S is sold in the U.S for PUS=47.55. The costs to export are the following per unit Assume that the absolute purchasing power parity holds between two nations. US

1.The exchange rate as of now is E F$=23.5. Compute the price of the basketball in France

2. Assume the exchange rate changes to E $F=0.015. What can you say about the two currencies values with respect to one another?

3. Compute the depreciation and appreciation rates.

4.Compute the new price of the basketball in France

A basket produced in the U.S is sold in the U.S for PUS=47.55. The costs to export are the following per unit: A basket produced in the U.S is sold in the U.S for PUS=47.55. The costs to export are the following per unit

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