The following table shows the nominal and real exchange rates for two countries and two years (OECD, 2020a,b). The columnnames are the country codes (not the currency codes) and the exchange rates are expressed as the amount of the currency perunit of US dollar.Year19791984i. DNK:O Increasedii. ISL:DNKO Increased5.261010.3566DecreasedRemained unchangedDecreasedNominala. Indicate whether the cost of goods in each country has increased, decreased, or remained unchanged, relative to thecost of goods in the United states between 1979 and 1984.Remained unchangedISL3.526031.6937DNK0.66211.1781RealISL0.86121.3433

The real exchange rate means the relative purchasing power of two different currencies. It adjusts…

The following table shows the nominal and real exchange rates for two countries and two years (OECD, 2020a,b). The column names are the country codes (not the currency codes) and the exchange rates are expressed as the amount of the currency per unit of US dollar. Year 1979 1984 i. DNK: O Increased ii. ISL: Decreased DNK O Increased 5.2610 Decreased 10.3566 a. Indicate whether the cost of goods in each country has increased, decreased, or remained unchanged, relative to the cost of goods in the United states between 1979 and 1984. Remained unchanged Nominal Remained unchanged ISL 3.5260 31.6937 DNK 0.6621 1.1781 Real ISL 0.8612 1.3433

The following table shows the nominal and real exchange rates for two countries and two years (OECD, 2020a,b). The column names are the country codes (not the currency codes) and the exchange rates are expressed as the amount of the currency per unit of US dollar. Year 1979 1984 i. DNK: O Increased ii. ISL: Decreased DNK O Increased 5.2610 Decreased 10.3566 a. Indicate whether the cost of goods in each country has increased, decreased, or remained unchanged, relative to the cost of goods in the United states between 1979 and 1984. Remained unchanged Nominal Remained unchanged ISL 3.5260 31.6937 DNK 0.6621 1.1781 Real ISL 0.8612 1.3433

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: International Finance

Section: Chapter Questions

Problem 3QP

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Based on the Balance of Payments account presented in this table, the net exports are: a. 2300 b. -2600 c. -300 d. -200
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