Problem Set 3 xinmiao - Problem Set 3 Question 1 a DOLLAR...

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Problem Set 3 Question 1 a) The bar chart above ranks prices ( US dollar ) in different countries, the values range from 1.46 to 6.35 increasingly. T he country with lowest price is Egyp t, and the highest price is S witzland. b) 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 DOLLAR PRICE IN 2017 JANUARY
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- 500 0 500 1000 1500 2000 2500 3000 Philippines Taiwan Mexico Vietnam Switzerland Portugal Norway Japan Germany Netherlands CostaRica Canada Euroarea CzechRepublic Estonia SouthKorea SaudiArabia Australia Peru Indonesia China Turkey Sweden Thailand Pakistan Russia Egypt Ukraine % INCREASE IN DOMESTIC PRICE
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T h e bar chart above shows the increment in percentage term in domestic price and we can see how Venezuela can be categ orized as outlier which causes the whole data to be inconsistent. 3) - 25 - 20 - 15 - 10 - 5 0 5 10 15 20 25 %INCREASE BELOW 20%
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The scatter plot above shows that the change in the real exchange rate is greater than the nominal exchange rate. B ecause e= ( EP ) /P* = E* ( P/ P*) , It is equal to the nominal exchange rate times the domestic price level divided by the foreign price level. - 0.6 - 0.4 - 0.2 0 0.2 0.4 0.6 0.8 - 2 0 2 4 6 8 10 12 14 REALEXCHANGERATEDEPRECIATION NOMINAL EXCHAGE RATE DEPRECIATION SCATTER PLOT FOR ALL THE COUNTRIES
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