Assume ee 091 one year from now the british interest rate
Assume Ee£/€ = 0.91 (one year from now), the British interest rate i£ = 0.02 and the euro interest rate i€ = 0.01 to calculate the current equilibrium spot rate E£/€.
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supose a consumers utility function is uxy x 2y the consumer has 8 to spend m 8 the price of good y is py 2 fill in
assume eepoundeuronbsp 091 one year from now the british interest rate ipoundnbsp 002 and the euro interest rate
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assume m200 px2 and py1 assume income is constant px decrease to 150 and py decreases to 75 this change in prices is
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