Suppose Canadian Wheat Sells for $100 Per Bushel and Russian

question 106

Essay

Suppose Canadian wheat sells for $100 per bushel and Russian wheat sells for 1600 rubles per bushel.
a.If you believe that the purchasing-power parity theory holds,and if the current exchange rate is 12 rubles per dollar,would you expect the exchange rate to change? In what direction would it change?
b.If the current exchange rate is 12 rubles per dollar,how much is the real exchange rate,based on the prices of wheat?
c.If the exchange rate is 12,how could you make profit in this situation? How much profit per bushel could you make?

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Definitions:

Embryonic Stem Cells

Pluripotent stem cells derived from the early embryo, capable of differentiating into any cell type in the body.

Induced Pluripotent Stem Cells

Stem cells created by reprogramming adult cells to an embryonic stem cell-like state by introducing specific genes.

Muscular System

The body system consisting of muscles that permit movement, maintain posture, and produce heat.

Plasma Membrane

The Plasma Membrane is the semi-permeable barrier that encloses the cytoplasm of a cell, controlling the movement of substances in and out, and playing a key role in cell communication and structure.