1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
____ [38]
2 years ago
8

Consider relative purchasing power parity (PPP) and remember the consumer price index (CPI) provides the price level in a countr

y at any point in time. Assume CPI in the US is 165 in 2010 and 200 in 2015, and CPI in Canada is 170 in 2010 and 220 in 2015 (with base year as 2000). If the spot exchange rate was 0.7640 USD/CAD in 2010, what is it in 2015 if relative PPP holds
Business
1 answer:
pychu [463]2 years ago
4 0

Answer:

0.7156 USD/CAD

Explanation:

Relationship between relative PPP and inflation rates can be expressed as given below:

S(1)/S(0) = (1+I(y)) / (1+I(x))................(1)

==> S(0) = spot exchange rate at the beginning of the time period

==> S(1)  = spot exchange rate at the end of the time period

==> I(y) = expected inflation rate for country y, which is foreign country

==> I(x) = expected inflation rate for country x, which is domestic country.

Here, assumes that the US is a foreign country and Canada is domestic country

I(y) = (200/165) - 1 = 21.21%

I(x) = (220/170) - 1 = 29.41%

On putting the values of I(x) and I(y) in the first equation, we get:

S(1)/0.764 = (1+0.2121) / (1+0.2941)

S(1)/0.764 = 0.9366354996

S(1) = 0.764*0.936635

S(1) = 0.7156 USD/CAD

If relative PPP holds, the spot exchange rate in 2015 will be 0.7156 USD/CAD

You might be interested in
You are working at the campus bookstore, earning $9.00 per hour. Your manager tells you that in the upcoming year, you will get
Anastaziya [24]

Answer:

a. $0.09

b. $0

c. -$0.09

Explanation:

Real rate = Nominal rate - inflation rate

a. Real rate = 2% - 1%

= 1%

Change in real wage = 9 * 1% = $0.09

b. = 2% -2% = 0%

Change in real wage = 9 * 0% = 0

c. = 2% - 3%

= -1%

Change in real wage = 9 * -1% = -$0.09

8 0
2 years ago
Which of the following is essential in a satisfying work environment?
Tems11 [23]
The answer is: B, A boss who is respectful and cooperative. Hope this helped.
7 0
3 years ago
Read 2 more answers
Sally and Andy are partners in Just Hats, LLC. Andy works in the business for an agreed salary draw of $4,000 per month. Sally h
den301095 [7]

Answer:

Net income allocated to sally is $112000

Explanation:

Sally invested $200000 and Andy invested $100000, which means Andy's  investment is half of Sally's investment. So he will receive the half of what Sally will get.

Let

Sally's pay be x

Andy's pay be x/2

Total Net income is 168000 dollars.

So, putting it in an equation, we get

(x+x/2)=168000

x(1+0.5)=168000

x(1.5)=168000

x= 168000/1.5

x=112000

So Sally's share will be $112000

Andy's share will be x/2

=112000/2

=56000

So Andy share will be $56000

4 0
2 years ago
Andy just purchased a 2.5 acre vacant lot of land for $500,000. What was the price per square yard?
julsineya [31]

Andy just purchased a 2.5 acre vacant lot of land for $500,000. $41.32 per sq. yd price per square yard.

$500,000 ÷ 12,100 sq. yds. = $41.32 per sq. yd

What is square yard?

  • The length times the width, expressed in feet, must be multiplied by 9, and the result is the square yard (SQYDS). A square yard measures 9 square feet.
  • One billion is referred to as "yard" in finance. The word is derived from "milliard," which is comparable to the number one billion in American English and is used in various European languages.
  • Add the area to the conversion factor to convert a square yard measurement to a square foot measurement. The square yards multiplied by nine gives the area in square feet.
  • Add the length to the conversion factor to convert a yard measurement to a meter measurement. The yards times 0.9144 converts to the length in meters.

To learn more about square yard visit:

brainly.com/question/13434616

#SPJ4

7 0
1 year ago
It is pizza night at the murphy home and everyone has an opinion about what they should get as a topping on the pizza. which cho
pishuonlain [190]

This isn't really a business question, but generally vegetables would be a healthier choice for a pizza topping instead of meats and cheeses.

7 0
2 years ago
Read 2 more answers
Other questions:
  • A company has $317,000 in credit sales. The company uses the allowance method of determining uncollectible accounts expense. The
    14·1 answer
  • The most obvious benefit of specialization and trade is that they allow us to
    9·1 answer
  • Judith puts $5000 into an investment account with interest compounded continuously. which approximate annual rate is needed for
    13·1 answer
  • Suppose the direct quote for sterling in New York is 1.3110-5. Then the direct quote for dollars in London is:________.
    5·1 answer
  • In the month of June, Jose Hebert’s Beauty Salon gave 3,580 haircuts, shampoos, and permanents at an average price of $34. Durin
    15·1 answer
  • The final part of the strategy-formulation process is choosing: a. functional-level strategies. b. functional-level goals. c. bu
    10·1 answer
  • . Which one of the following is an example of an economic good? (a) visit to a dentist (b) pair of sneakers (c) lesson taught by
    8·1 answer
  • Which of the following would be referred to as "accruals?" (Select all that apply.) A. Cash paid prior to expenses being incurre
    12·1 answer
  • Suppose you believe that Florio Company's stock price is going to decline from its current level of $82.50 sometime during the n
    10·1 answer
  • Do you think that their economy will be strong when they have to write off debt from countries that have borrowed heavily from t
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!