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    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.