Question 1: Suppose that two firms produce differentiated products and compete in prices. As in class, the two firms are located at two ends of a…
September 30, 2020
Q output TC TFC TVC ATC MC AVC AFC 0 100 1 190 2 270 3 340 4 400 5 470 6 550 7 640 8 750 9 880 10 1030 11 1200 Original Technique Q output TC TFC TVC…
September 30, 2020
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One year interest rates are 12% in Brazil and 4% in the United States. The current exchange rate between the Brazilian real and the dollar is 2.25…

One year interest rates are 12% in Brazil and 4% in the United States. The current exchange rate between the Brazilian real and the dollar is 2.25 real per dollar. If there is interest rate parity, what must investors expect the real per dollar exchange rate will be one year from now?

 

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