Purchase Solution

The Real Exchange Rate

Not what you're looking for?

Ask Custom Question

Consider the following data for the United States and Switzerland:

GDP Deflator Switzerland GDP Deflator United States Market Exchange Rate
- 1980 85.7 76.0 2.49 francs/$
- 1990 113.4 119.6 2.12 francs/$

Compute the real exchange rate for 1980 and 1990.
(Real exch. rate = (exch. Rate*U.S. price index)/foreign price index)

Purchase this Solution
Solution Summary

This response provides a very concise response which illustrates how to compute the real exchange rate values.

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • Exchange rates (nominal, real)

    -Did the zloty depreciate or appreciate in real terms, relative to the dollar, by what percentage? -using last year as the base, what is the real exchange rate of zloty against today? -what is the nominal exchange rate today?

  • Computer the real exchange rate

    Computer the real exchange rate for 1980 and 1990.

  • Finance - Real Interest Rate

    577533 Finance - Real Interest Rate I agree that the changes in real interest rates change in accordance with the change in the exchange rate. The nominal interest rate minus the inflation interest rate would be the real rate of return.

  • Exchange Rates and Elasticity

    b.If the elasticity of U.S. exports with respect to the real exchange rate is very low, will this increase in private saving have a large or small effect on the U.S. real exchange rate? Solutions: a.

  • Short & Medium Term Exchange Rate Changes

    33821 Short & Medium Term Exchange Rate Changes 1. What is the "real" exchange rate, and why are changes in it more important than changes in the nominal exchange rate. 2.

  • International Finance

    Permanent in this context means that the best predictor of tomorrow's real exchange rate is today's rate. It doesn't mean that the real rate tomorrow will be the same as the real rate today; rather, the real rate follows a random walk.

  • Exchange Rate, PPP, Inflation, and Interest Rate

    Which of the following statements regarding the real exchange rate is FALSE?

  • real exchange rates

    2.49 francs/$ 1990 113.4 119.6 2.12 francs/$ a- Compute the real exchange rate for 1980 b- Compute the real exchange rate for 1990 Dear Student

  • Real vs Nominal Exchange Rate

    Since the real exchange rate is the nominal rate adjusted for inflation, then the price levels must be the same. 15.

View More Related Solutions