In the few years before the Eurozone crisis, the real effective exchange rates (REERs) of countries in southern Europe (such as Greece and Spain) relative to the German REER added to the problems created by a strong euro in southern European countries." Do you agree with this statement? Explain and discuss. "Two parity theories of exchange rate determination - relative purchasing power parity (expectational form) and uncovered interest rate parity - have similar implications for future exchange rates." Is this statement correct? Explain. The current Venezuelan political and economic crisis deepened in late 2015. On September 30th, 2015, Venezuela's currency the Bolivar was trading at S(Bolivar/Dollar) = 800; one month earlier it was S(Bolivar/Dollar) = 684. Many currency forecasters were predicting that the Bolivar would fall an additional 70% from its September 30th value by the end of 2015. (i) What was the percentage change in the value of the Bolivar relative to the US dollar during September 2015 (ii) What was the forecast Bs/$ exchange rate for end 2015?

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Lets address each statement and question 1 Real Effective Exchange Rates REERs in Southern Europe relative to Germany The statement suggests that the real effective exchange rates REERs of countries i... View the full answer