Laura Chenel, a US dairy company, exports aged cheeses to Japan and Canada. In this problem, you'li

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Question:

Laura Chenel, a US dairy company, exports aged cheeses to Japan and Canada. In this problem, you'li compare the relative attractiveness of selling cheddar cheese in the US, Japan, and Canada. Consider the following information:

Country Currency Bank(Nominal)Exchange Price of Cheddar Cheese Rate Block in Local Currency

US N/A 3.00

Japan 0.009500 per 350

Canada CA$ 0.7700 per CA$ CA$ 3.50

Assume the cheddar cheese exported is identical to that sold in the US. Based on this information, answer the following questions.

i) What is the absolute purchasing power parity (APPP) exchange rate of each currency, $ per and $ per CA$, based on local cheddar cheese prices?

ii) What is the real exchange rate from the US perspective for each country,R$/ and R$/CA$,based on bank (nominal spot) exchange rates and cheddar cheese prices in the local

currencies?

iii)What does the US company receive in US$ (that is, after conversion) per block of cheddar cheese sold in each country?