Graphically illustrate and explain the exchange rate regime over a 15-year period for two small open Caribbean economies. One must have an exchange rate system that is fixed or pegged and the other a floating exchange rate system.

If purchasing power parity between two countries were to hold, does this mean that the law of one price must necessarily hold for each good? Explain why or why not and provide an example.

Explain the function and structure of the foreign exchange market

Explain the two different concepts of purchasing power parity PPP and how they relate to the Law of one price.   explain the balassa-samuelson Effect and its implications for PPP

The Table below shows data for Terrania and its three trading partners A, B, C. Assume that the effective exchange rate index in year 1 equals 100, defining the index so that a higher number means a stronger exchange rate the value of the index in year 2 is? (express your answer to 2 decimal places) Country A Country B Country C Terrania Share of Terranian Trade 0.4 0.3 0.3 Exchange Rate (units per Terranian Kwacha) year 1 year 2 Price Level year 1 year 2 1 3 2 4 1 1 1 1 1.1 1.2 1.3 1

Suppose that a U.S. dollar buys more gold in Australia than it buys in Russia. What does purchasing-power parity imply should happen?

If the purchasing-power parity theory is true, then the nominal exchange rate between two countries equals the ratio of the countries’ price levels    • True • False

Identify the type of exchange rate that Jamaica uses and discuss the benefits/drawback s of this exchange rate system.