In New York, a can of coffee costs about $5 and in Saudi Arabia, it costs...

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Economics

  1. In New York, a can of coffee costs about $5 and in SaudiArabia, it costs about 20 Saudi Riyals. If the exchange rate isabout 0.27 dollars per riyal, what is the real exchange rate?
  2. Analyze the impact of Saudi Riyal appreciation in US dollar foreach of the following cases
    1. A US firms plans to invest in Saudi Arabia
  1. You are planning to visit USA in summer holidays ​​​​​​

Explain what will happen to the size of both M1 and M2in each of the following situations:

  1. Sahar withdraws $300,000 from her checking account to pay forher admission fee in US.
  2. Muntaha transfers $5,000 from her checking account to hersaving account. decrease M1 and not change M2.

Answer & Explanation Solved by verified expert
4.2 Ratings (599 Votes)
a Can of Coffee 5 Saudi Arabia 20 riyals 1 riyal 027 Dollar value is high 1 dollar 027x 37 riyals 1027 Real exchange rate formula is Nominal exchange rate Domestic price Foreign price 371 5coffee can 20 coffee can 37 520 18520 0925 Saudi    See Answer
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