Assume that the export price of a Sony Smartphone from Naguya, Japan is VIS. Theexchange rate is 87.60S. The forecast rate of inflation in the United States is 22% peryear and is 1,5% per year in Japan. Use this data to answer the following questions onexchange rate pass through.a. What was the export price for the Sony Smartphone at the begianing of the yearexpressed in U.S. dollars?b. Assuming purchasing power parity holds, what should the exchange rate be at the endof the year?e. Assuming 100% pass-through of exehange rate, what will the dollar price of a SonySmartphone be at the end of the year?ninid. Assuming 80% pass-through, what will the dollar price of a Sony Smartphone be atthe end of the year?

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Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 34P: The total price of purchasing a basket of goods in the United Kingdom over four years is: year...

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M25 M. N. B Problem Set #1 Calculation of Consumer Price Inflation Instructions: Complete this sheet by computing the spending for each product for both years ; then calculate the total spending for the two years each year; then compute the inflation % between BONUS: calculate total price inflation as Year = Y2016 Quantity Price Spending a weighted average 6 $10 ALL ANSWERS should also be written on the Problem Set Answer sheet Pizzas 50 Hairstyles 24 $25 Music 200 $1.80 Gasoline 350 $3.00 Shoes 6. $75 Total Price Inflation as 11 a Weighted Average 12 13 Cost of Market Basket in 2016 = Product Budget Inflation Inflation Share Rate Budget 14 Year = Y2020 Quantity Price Spending Rate Y2016 Share 15 16 $12 $28 17 Pizzas 50 Hairstyles 24 18 Music 200 $1.65 19 Gasoline 350 $3.30 20 Shoes 6 $78 21 22 Cost of Market Basket in 2020 = 23 24 25 Price Inflation from 2016 to 2020 = 26 27
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