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Suppose it is May 1, 1981 and the price indexes in Spain and the U.S.

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Suppose it is May 1, 1981 and the price indexes in Spain and the U.S., which both began the year at 100, are at 117 and 105, respectively, by the end of the year. If the beginning and ending exchange rates, respectively, for the peseta are $.1320 and $.1125, then the change in the real value of the peseta (a " " indicates a real devaluation) during the year is?

 

Paper#25742 | Written in 18-Jul-2015

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