Business, 24.11.2021 14:10 reich9357

If we start with the same scenario as before: a bottle of wine costs 20 euros in France and 25 dollars in the United States, nominal exchange rate is .80 euros/dollar, but then the EU decides to increase the money supply, causing prices to increase and the price of a bottle of wine increases to 30 euros. What does the new nominal exchange rate have to be in order for purchasing power parity to hold

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If we start with the same scenario as before: a bottle of wine costs 20 euros in France and 25 dolla...