Suppose Polish wheat costs 300 zloty per kg. and that Turkish wheat costs 6TL per kg....

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Suppose Polish wheat costs 300 zloty per kg. and that Turkish wheat costs 6TL per kg. assume that wheat is identical product. Answer the following questions according law of one price and purchasing power parity a. If the exchange rate is 300 polish zlotys per Turkish lira, what is the price of Polish wheat in TLs? b. What is the price of Turkish wheat in zlotys? c. What will be the demand for Polish wheat? Why? d. If the exchange rate is 600 Polish zloties per TL, what is the price of polish wheat in TLs? e. What is the price Turkish wheat in zloties? f. What will be the demand for Turkish wheat? Why? g. If the price of Turkish wheat rises 10TL per kg, what does the law of one price suggest will be new exchange rate h. If the Turkish price level doubles while in Poland remains unchanged, what does the theory of purchasing power parity suggest will happen to the exchange rate which initially s at 500 zloty=1TL? i. If the Turkish inflation rate is 5% and Polish inflation rate is 7%, what does the theory of purchasing power parity predict will happen the value of TL in terms of zloties in one year's time? Suppose Polish wheat costs 300 zloty per kg. and that Turkish wheat costs 6TL per kg. assume that wheat is identical product. Answer the following questions according law of one price and purchasing power parity a. If the exchange rate is 300 polish zlotys per Turkish lira, what is the price of Polish wheat in TLs? b. What is the price of Turkish wheat in zlotys? c. What will be the demand for Polish wheat? Why? d. If the exchange rate is 600 Polish zloties per TL, what is the price of polish wheat in TLs? e. What is the price Turkish wheat in zloties? f. What will be the demand for Turkish wheat? Why? g. If the price of Turkish wheat rises 10TL per kg, what does the law of one price suggest will be new exchange rate h. If the Turkish price level doubles while in Poland remains unchanged, what does the theory of purchasing power parity suggest will happen to the exchange rate which initially s at 500 zloty=1TL? i. If the Turkish inflation rate is 5% and Polish inflation rate is 7%, what does the theory of purchasing power parity predict will happen the value of TL in terms of zloties in one year's time?

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Answers based on Law of One Price LOP and Purchasing Power Parity PPP a Price of Polish wheat in TLs At 300 zlotykg and 300 zlotyTLthe price remains30... View the full answer