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never [62]
3 years ago
14

Suppose purchasing power parity holds. If the price level in the United States is 100 dollars per good and the price level in Ja

pan is 250 yen per good, then the nominal exchange rate is ________ yen per dollar.
Business
1 answer:
Korolek [52]3 years ago
6 0

Answer: 2.5 Yen

Explanation;

The Economic theory of Purchasing Power Parity when held, believes that prices of goods in different countries are the same if their exchange rates are taken into account.

For the above therefore it means that the price of the good is the same in both the US and Japan barring exchange rates.

Exchange rate is;

$100 = ¥250

$1 = 250/100

$1 = ¥2.5

Exchange rate is 2.5 yen per dollar.

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Suppose you are committed to owning a $215,000 ferrari. if you believe your mutual fund can achieve an annual return of 10.8 per
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Answer: I must invest <u>$85424.14</u> today in order to buy a Ferrari nine years from now on the day I turn 30.

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Answer:

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