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Computer the real exchange rate

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GDP Deflator France GDP Deflator US Market exchange
rate
1980 85.7 76.0 2.49 francs/$
1990 113.4 119.6 2.12 francx/$

Computer the real exchange rate for 1980 and 1990.

I know the following:
real exchange rate = exchange rate * US price index/foreign price index
GDP deflator is nominal GDP/real GDP * 100

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Solution Preview

The data you have is

GDP Deflator GDP Deflator Market exchange
France US Rate
1980 85.7 76.0 2.49 francs/$
1990 ...

Solution Summary

Market exchange rate and price indices are contrasted briefly.

$2.19