Use the information in the chart to calculate the real exchange rate between the U.S. dollar and the Indian rupee. Round to the

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3 years ago

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Use the information in the chart to calculate the real exchange rate between the U.S. dollar and the Indian rupee. Round to the

nearest whole number. 2014 2015 2016 rupees/dollar 57 62 72 U.S. price index 99.5 100.1 101.1 Indian price index 108 117 128 What was the real exchange rate in 2014

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1 answer:

JulsSmile [24] · Answer 1 · 2022-04-14T01:39:26+03:00

Answer: 52.51 rupees/dollar

Explanation:

The real exchange rate attempts to account inflation in the countries being compared by using prices in the exchange rate.

The formula for calculating it is;

Real exchange rate = Nominal exchange rate *(Price index of domestic country/Price index of foreign country)

Real exchange rate in 2014 = 57*(99.5/108)

= 52.51 rupees/dollar