Ask question

Ask question

All categories

liberstina [14]

2 years ago

10

The nominal exchange rate is 4 Saudi Arabian riyals, 8 Moroccan dirham, 60 Indian rupees, or .8 euros per U.S. dollar. A fast fo

od breakfast costs $5 in the U.S., 30 riyals in Saudi Arabia, 40 Moroccan dirham in Morocco, 250 Indian rupees in India, and 5 euros in France. According to these numbers, where is the real exchange rate between American and foreign goods the lowest?a. Saudi Arabia
b. Britain
c. India
d. Morocco

2 answers:

ale4655 [162]2 years ago

7 0

Answer:

A) Saudi Arabia

Explanation:

The real exchange rate = nominal exchange rate x (domestic price of a breakfast / foreign price of a breakfast)

a breakfast in America = $5

a breakfast in Saudi Arabia = $7.50

a breakfast in Morocco = $5

a breakfast in India = $4.17

a breakfast in France/Britain = $6.25

real exchange rate with Saudi Arabia = $1 x ($5/$7.50) = $0.67, the riyal is over appreciated against the US dollar

real exchange rate with Morocco = $1 x ($5/$5) = $1

real exchange rate (India) = $1 x ($5/$4.17) = $1.20, the rupee is undervalued against the US dollar

real exchange rate (France/Britain) = $1.25 x ($5/$6.25) = $1

rosijanka [135]2 years ago

6 0

Answer:

b. Britain (France)

Explanation:

The nominal exchange rate is the rate at which an individual can trade the currency of his country for another country.

According to the numbers given for exchange rates, the real exchange rate between American and foreign goods is lowest with Britain.

You might be interested in

Hill Corporation issued $2,100,000 of 8% bonds at 98 on January 2, 2019. Interest is paid semiannually on June 30 and December 3

Butoxors [25]

Answer:

Hill Corporation

Journal Entries

March 31, 2022:

Debit Bond Liability $2,247,000

Debit Interest Payable $42,000

Credit Cash $2,289,000

To record the recall of the bonds, including accrued interest.

Explanation:

a) Data and Calculations:

January 2, 2019: Face value of bonds issued = $2,100,000

Proceeds from the issue of the bonds at 98 = 2,058,000

Discount from the issue = $42,000

Semi-annual amortization under straight-line = $2,100 ($42,000/20)

Coupon interest rate = 8% with payment made semiannually

Annual interest payment = $168,000 ($2,100,000 * 8%)

Semiannual interest payment = $84,000 ($2,100,000 * 4%)

Bonds duration = 10 years

March 31, 2022 Recall price of 107 = $2,247,000

Accrued interest from January 1 to March 31 = $42,000

Total payment to bondholders = $2,289,000

5 0

2 years ago

Suppose an assistant professor of economics is earning a salary of $75,000 per year. One day she quits her job, sells $100,000 w

Akimi4 [234]

Answer:

Economic profit $10,000

Explanation:

Income earned as an assistant professor = Salary + Interest on bonds = 75000 + 5% on 100,000 = 75000 + 5000

Income earned as an assistant professor = $80,000

Income from the bookstrore = $90,000

In calculating economic profit, opportunity costs are deducted from revenues earned.

Economic profit = $90,000 - $80,000 = $10,000

4 0

3 years ago

A government deficit has increased from 30 to 50. The country's trade deficit is 100 and private savings equal 65 and investment

viva [34]

Answer:

If Ricardian neutrality holds true, after this change in the government's budget, private savings will equal 40.

Explanation:

S - I = X - M, where

S = Sp + Sg, where

Sp: private saving

Sg: Public saving = T - G

Sp + T - G - I = X - M

or,

Sp - I = (G - T) - (M - X) = Budget deficit - Trade deficit

Initially,

65 - 30 = 90 - 100 = - 10

When budget deficit falls to 50,

Sp - 90 = 50 - 100

Sp = - 50 + 90 = 40

Therefore, If Ricardian neutrality holds true, after this change in the government's budget, private savings will equal 40.

7 0

2 years ago

A market gap is which of the following?

nlexa [21]

Answer:

b

Explanation:

.......................................

5 0

3 years ago

American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed const

Simora [160]

Answer:

Following are the solution to this question:

Explanation:

$Answer \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Installment \ Amount \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ = \frac{4700000}{PVAF(11\%,4)} = 1,514,934$

$Answer \ 1 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Machinery A/c \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,700,000\\\\$

$\text{To Lease Payable} A/C \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,700,000 \\\\ \text{(Being machine purchased on lease)}$

$Answer \ \ 2$ $years \ \ \ \ \ \ \ \ Outstanding \ \ Amount \ \ \ \ \ \ \ \ Installment \ \ \ \ \ \ \ \ Interest (11 \%) \ \ \ \ \ \ \ Closing \ on \ Due \\\\$ $0 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,700,000 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,700,000 \\\\1 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,700,000 \ \ \ \ \ \ \ \ \ \ \ \ 1514934 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 517000 \ \ \ \ \ \ \ \ \ \ \ \ 3702066\\\\$

$2 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 3,702,066 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1514934 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 407227 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 2594359 \\\\3 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 2,589,359 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1514934 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 285380 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1364805\\\\4 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1,364,805 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1514934 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 150129 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 0 \\\\$

$Answer \ \ 3 \ \ \ \ \ \ \ \ \ \ \ \ \ \ Lease Payable \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 997,934$

$expenses \ \ Interest \ \ \ \ \ \ \ \ \ \ \ \ \ \ 517,000\\\\ To\ \ cash \ A/c \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1,514,934 \\\\ \text{(First Installment Paid)}$

$Answer \ 4 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Lease payable \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1,229,554$

$expenses \ \ Interest \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 285,380\\\\ To cash A/c \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1,514,934\\\\ \text{(Third Installment Paid)}$

6 0

2 years ago