The exchange rate at the beginning of a year between the Indian Rupee (R) and th

Question

The exchange rate at the beginning of a year between the Indian Rupee (R) and the U.S. dollar is R43.125/$. The annual inflation rates in India and in the United States are 19 percent and 3 percent respectively. What would be the new exchange rate at the end of the year? The exchange rate at the beginning of a year between the British Pound (Pound) and the U.S. dollar is Pound.6289/$. The annual inflation rates in Britain and in the United States are 8 percent and 2 percent respectively. What would be the new exchange rate at the end of the year? Suppose Country A has a currency called the Pulse (P). At the beginning of the year, the exchange rate between the Pulse and the U.S. dollar was P150/$. The inflation rate in Country A is running at an annual rate of 250 percent, whereas inflation in the U.S. is running at 2 percent. Calculate the new exchange rate that Pulse can expect at the end of the year? Suppose Country Z has a currency called the Bundt (B). At the beginning of the year, the exchange rate between the Bundt and the U.S. dollar was B.8156'S. The inflation rate in Country Z is running at an annual rate of 12 percent, whereas inflation in the U.S. is running at 17 percent. Calculate the new exchange rate that the United States can expect at the end of the year? Under the gold standard, if the U.S. dollar was fixed at $30/oz of gold and Japan was fixed at yen75/oz of gold, calculate the Yen/dollar exchange rate? The exchange rate between the euro (pound) and the dollar is pound0.8461/$. Which of the following is the correct direct quote on the dollar? B) $1.1819/pound What is the indirect quote on the dollar in #6?

Explanation / Answer

1.

New exchange rate = Beginning exchange rate × (I’s inflation percent/U’s inflation percent)

                                    = 43.125 × (19 / 3)

                                    = 273.125

Answer: The new exchange rate is R273.125/$

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.