Business, 02.11.2020 17:20, wyndal1753

1. Consider two countries, France and Russia, and two goods, wine and vodka. Assumethat in both countries, both wine and vodka account for equal shares in their respectiveconsumption baskets. Suppose that the dollar-price of wine in France is half of thedollar-price of wine in Russia. In order for absolute PPP to hold, what must be theratio of the dollar-price of vodka in France relative to the dollar-price of vodka inRussia?2. Suppose the inflation rate in Australia is expected to be 0.02 and its currency isexpected to appreciate against that of South Africa by 0.04. In order for relativePPP to hold, what must be the expected inflation rate in South Africa (state youranswer to two decimal places)?3. Suppose the price for one ounce of gol

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1. Consider two countries, France and Russia, and two goods, wine and vodka. Assumethat in both coun...