1. Suppose the exchange rate between US$ and Euro, US$ and Japanese Yen are: Â Â Â 1 US$...

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Economics

1. Suppose the exchange rate betweenUS$ and Euro, US$ and Japanese Yen are:
Â Â Â 1 US$ = 2 Euro; 1US$ = 100 Yen.
Â Â Â Suppose theinterest rates published by central banks in the U.S., Euro zone,and Japan are 2%, 3%, and 4%, respectively;
Â Â Â And, suppose theinflation rates in the U.S., Eurozone, and Japan are 1%, 2%, and1%,
Â Â Â respectively.Therefore, (calculation formula is optional)
Q1.1: How much Yen can 1 Euro exchangefor?
Answer1.1:
Q1.2: What is the real interest ratefor the US, Euro zone, and Japan, respectively?
Answer1.2:
Â Â Â Â Â Â Â Â Â Â Â US=
Â Â Â Â Â Â Â Â Â Â Â Euro zone=
Â Â Â Â Â Â Â Â Â Â Â Japan=
Q1.3: (True/False) A person with 2Euro can convert the money into Yen and save it in Japanese banksfor one year, and get 103 Yen back.
Answer1.3:

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4.2 Ratings (840 Votes)

11 1US 2 Euro 1US 100 Yen 100 Yen 2 Euro 1 Euro 100 Yen 2 1 Euro 50 Yen 1 Euro can exchange for 50 Yen 12 Real interest rate Nominal Interest rate Infaltion rate The real interest rate in US Nominal Interest rate in See Answer

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