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Question: In Munich, a bratwurst costs 5 euros; a hot dog costs $4 at Boston's Fenway Park. The euro/dollar...

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Show transcribed image text In Munich, a bratwurst costs 5 euros; a hot dog costs $4 at Boston's Fenway Park. The euro/dollar exchange rate is $1.05/per euro (1 euro = $1.05 US). a. What is the price of a bratwurst in terms of a hot dog? b. All else equal, how does this relative price change if the dollar depreciates to $1.25 per euro? c. Compared with the initial situation, has a hot dog become more or less expensive relative to a bratwurst?

In Munich, a bratwurst costs 5 euros; a hot dog costs $4 at Boston's Fenway Park. The euro/dollar exchange rate is $1.05/per euro (1 euro = $1.05 US). a. What is the price of a bratwurst in terms of a hot dog? b. All else equal, how does this relative price change if the dollar depreciates to $1.25 per euro? c. Compared with the initial situation, has a hot dog become more or less expensive relative to a bratwurst?