purchasing power parity

[ahlashi]

A  10kg basket of apples cost 15$ in the US and the same apple of goods cost rs100per kg in india.
the nomial exchange rate is rs 50 per us dollar

comment on using the real exchange rate as an indicator of purchasing power parity


now here
i hve calculated the real exchange rate which is E.P*/P = 7.5
HOW DO I GO ABOUT THE PPP PART ?

someone pls help
im really confused

[Eco16]

are you converting price in india in terms of dollars for calculating real exchange rate?

[Eco16]

have you done Q 4,8,7 of the same paper?

[ahlashi]

part a or b ?

i have tried but im not sure
if you want we can discss

[Eco16]

Part B.
Question 8 i am getting M,I,NONE,M,I,I,C,M and I.
Question 4 i got Change in G by 1000 and after change by 2000.
Question 7 I am not getting it.

[ahlashi]

for 4th im getting the same

in 7th i have used the concept of price indices
yu can calculate paasche price index and laspeyres price index and the easily conclude

8th)
1.MTA
2.IA
3.NONE
4.IA
5.NONE
6.IA
7.IA
8.MTA
9.I DONT KNOW IF THEY WILL BE INCLUDED ANYWHERE, WILL FINANCIAL TRANSACTION BE INCLUDED  IN CAPITAL ACCOUNT
10.IA

can you pls help me out with B6 AND OFCOURSE  B10.

[Eco16]

Shouldn't the Import of capital equipment belongs to capital account ? and foreign securities in Merchandise account?
Even I am not able to solve Ques 10.
Ques 6-
df/dY.Y/F=0.4
Given dY/Y=0.07
so dF/F=0.07times0.4
equals 0.028 or 2.8%.(matched with earlier discussion on the forum about this question)
What I don't get is that Why are we ignoring population effect ?

[ahlashi]

i think current only
and not sure about financial securities

have you done 2006 and 2005 ?

[Eco16]

I don't have these papers but if you can provide me with that i will do.

[ahlashi]

i have a hard copy. you can try searching for the link maybe on jnu site

[Eco16]

It is not available online, I tried earlier.
You can just post the questions that you are unable to do .