real exchange rate switzerland and the U.S.
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Consider the following data for the U.S. and Switzerland:
GDP Deflator Switzerland GDP Deflator U.S. Market Exchange Rate
1980 85.7 76.0 2.49francs/$
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)
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Solution Summary
Compute the real exchange rate in this case.
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