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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
hey pls solve this ques. Question 3: The relationship between nominal exchange rate and relative prices. From the annual observations from 1980 to 1994, the following regression results were obtained, where Y = exchange rate of the German mark to the U.S. dollar (GM/$) and X = ratio of the U.S. consumer price index to the German consumer price index; that is, X represents the relative prices in the two countries: ˆYt = 6.682 - 4.318Xt r 2 = 0.528 se = (1.22)(1.333) a. Interpret this regression. How would you interpret r2? b. Does the negative value of Xt make economic sense? What is the underlying economic theory?
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