The exchange rate is CAD 1.00 USD 0.75 and a cup of regular coffee at the McDonald's in Niagara Falk, Ontario costs $2 CAD. PPP suggests that the price of a cup of regular coffee at the McDonald's in Niagara Falls, New York should be Select one: A. USD 2.00. B. USD 0.75. C. USD 1.50. D. USD 1.33. E. US$ 2.67.
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- Is a country for which imports and exports comprise a large fraction of the GDP more likely to adopt a flexible exchange rate or a fixed (hard peg) exchange rate?If Boblandia had a flexible exchange rate, it would cost 5 Bobos to purchase a Canadian dollar. The Central Bank of Boblandia (aka, the Bank of Boblandia, or BoB) has fixed the exchange rate, saying it will buy or sell Bobos at C$0.25 for each Bobo. Which of the following is true? O At the fixed exchage rate, supply of Bobos exceeds demand. The BoB's holdings of Canadian dollars will increase. O At the fixed exchage rate, supply of Bobos exceeds demand. The BoB's holdings of Canadian dollars will decrease. O At the fixed exchage rate, supply of Bobos is less than demand. The BoB's holdings of Canadian dollars will increase. O At the fixed exchage rate, supply of Bobos is less than demand. The BoB's holdings of Canadian dollars will decrease.If a Big Mac is selling in the United States for $3.57, what is the implied exchange rate between each of the currencies in the table? (Enter your responses rounded to two decimal places.) Big Mac Price Actual Exchange Rate 7.50 reais 1.58 reais per dollar 7.00 zlotys Implied Exchange Rate reais per dollar zlotys per dollar won per dollar korunas per dollar 2.03 zlotys per dollar 1,018 won per dollar 3,200 won 66.10 korunas 14.5 korunas per dollar According to your results, the U.S. dollar is Country Brazil Poland South Korea Czech Republic against the South Korean won and againt the Brazilian real.
- Suppose you trade dollars and euros for a bank that has branches in Los Angeles and Paris. You can electronically transfer the funds between the two branch locations at no cost, and trading commissions are negligible. The current dollar-per-euro exchange rate in Los Angeles is ESEUR LA 1.6027, РА while in Paris, it is Es/EUR 1.569. You can make a profit for the bank if you buy euros in and sell them in Assuming other foreign exchange traders face the same exchange rates you do, they will buy dollars in and sell them in PA РА . As a result, the dollar-per-euro exchange rate in Paris (Es/EURA) will and the dollar-per-euro exchange rate in Los Angeles (ES/EURA) willExchange Rate, Canadian dollar expressed in US dollars 0.95 0.85 0.75 0.65 0.55 0.45 0.35 0.25 0.15 7 5 Fi Based on the exchange rate diagram above, how many US dollars do you need to purchase 200 Canadian dollars? Round your answer to two decimals. S T. A- XG 10 15 20 25 30 35 40 45 50 55 60 65 70 G of Cdn3 Ballons D DC #I BIUAt the equilibrium Exchange rate, a Yenchik tourist visiting Eurania exchanged 500 yen to buy a movie ticket in Eurania that cost 20 euros. Calculate the exchange rate , expressed as the number of yen per one euro. Show your work 
- In quoting exchange rates: a. One should always quote these as units of foreign currency over a unit of domestic currency b. One should always quote the rate as the units of domestic currency over a unit of foreign currency c. Usually one should quote the rate in such a way that the value is greater than one d. Each country's central bank determines how the rate is to be quotedRefer to the following graph when answering the questions that follow. 2.00 1.75 Supply of Euros 1.50 ER 1.25 1.00 0.75 0.50 Demand for Euros 0.25 4 6 10 12 14 16 QUANTITY OF EUROS (Billions) At the official exchange rate of 1.25 ringgit per euro, the euro is and the Malaysian ringgit is which means that Malaysians pay for European exports than they would with a free-floating exchange rate. At the official ringgit price of euros, there is a of euros in the foreign exchange market. Suppose the governments of the Eurozone and Malaysia reevaluate their currencies so that their official exchange rate is now 1 ringgit per 1 euro. This action results in of the euro. EXCHANGE RATE (Ringgit per euro)Suppose you observe the following exchange rates and interest rates for the USD and JPY: Bid Ask USD/JPY 105.20 105.95 USD,JPY F,360 104.25 105.10 Trader lends at Trader borrows at I USD ? ? I JPY 1.40% 1.50% Which answer is closest to the maximum US lending rate that prevents covered interest rate arbitrage? 3.21% 3.16% 3.05% 2.32% 2.42%