Assuming that purchasing power parity holds,write an equation that expresses the relationship among the percentage change in the nominal exchange rate, the domestic inflation rate, and the foreign inflation rate. Briefly explain this equation.

Suppose that the inflation rate in the United States is 5%, and the inflation rate in the United Kingdom is 8%. Use purchasing power parity to predict what is likely to happen to the exchange rate between the pound and the dollar. If the euro appreciates, how will this affect your purchases of U.S. and

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze foreign exchange rates. a. Find the most recent values from FRED for the Japan/U.S. Foreign Exchange Rate (DEXJPUS), China/U.S. Foreign Exchange Rate (DEXCHUS), and the Mexico/U.S. Foreign Exchange Rate (DEXMXUS). b. Explain whether the exchange rates are quoted as U.S. dollars per unit of

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze foreign exchange rates. a. Find the two most recent values from FRED for the Japan/U.S. Foreign Exchange Rate (DEXJPUS) and for U.S. Exports of Goods to Japan, f.a.s basis (EXPJP). b. Given the change in the exchange rate between the two periods, explain if

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze foreign exchange rates. a. Find the two most recent values from FRED for the Japan/U.S. Foreign Exchange Rate (DEXJPUS) and the U.S. Imports of Goods from Japan, Custom Basis (IMPJP). b. Given the change in the exchange rate between the two periods, explain if

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze foreign exchange rates. a. Find the most recent value and the value from the same month one year earlier from FRED for the U.S./Euro Foreign Exchange Rate (EXUSEU). b. Using the values found above, compute the percentage change in the euro’s value. c. Explain

Using data from the St. Louis Federal Reserve(FRED) (http://research.stlouisfed.org/fred2/), analyze differences in labor productivity among the China, India, and the United States. a. From 1952 to the present, download data for real GDP per worker for China (RGDPL2CNA627NUPN), India (RGDPLWINA627NUPN), and the United States (RGDPLWUSA627NUPN). Chart the series on a graph. b. Calculate the relative

What is a balanced growth path? Why did Germany diverge from a balanced growth path at the end of World War II? Why did it return?

Go to the World Bank’s Web site (www.worldbank.org) and look up the most recent World Development Report. What are the current challenges for global growth? At what rate is the world expected to grow? How are growth rates different in different regions?

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed. org/fred2/), analyze the long-run growth rate of the United States. a. Download quarterly data on real GDP (GDPC1) from 1947 to the present. Calculate the growth rate of real GDP as the percentage change from the same quarter during the previous year. Graph your results.