OpenStudy (anonymous):

Can someone help me with some economic questions?

3 years ago
OpenStudy (jim_thompson5910):

I can't guarantee anything 100%, but I'll give it a shot

3 years ago
OpenStudy (anonymous):

ok hold on

3 years ago
OpenStudy (anonymous):

did you see my attachment?

3 years ago
OpenStudy (jim_thompson5910):

yes I see it and I'm thinking on it now

3 years ago
OpenStudy (jim_thompson5910):

for the first one, it says "analysts expect the value of the Costa Rica colon to rise relative to the peruvian neuvo sol" so that means if we start with a 1:1 relationship (costa rica on the left, peru on the right), then we'll jump to maybe a 1.5:1 relationship. Now Costa Rica colon is worth more compared to one peruvian neuvo sol Put another way, the peruvian neuvo sol is now worth less compared to the Costa Rica colon since it can buy less of the currency So that makes me think the first one is depreciation since we are focusing on the peruvian neuvo sol

3 years ago
OpenStudy (jim_thompson5910):

actually, hmm I might have that backwards sorry about that, if the Costa Rica colon rises compared to the peruvian neuvo sol, then it costs less Costa Rica colons to get a single peruvian neuvo sol so we go from 1:1 to 0.5:1 multiply both sides by 2 and we get 1:2 which means it costs more peruvian neuvo sol to get a single Costa Rica colon. So when the Costa Rica colon appreciates, the peruvian neuvo sol depreciates (relative to Costa Rica). I guess I'm not as helpful as I thought I'd be in this area.

3 years ago