Between last year and this year, the CPI in Blueland rose from 100 to 116 and the CPI in Redland rose from 100 to 112. Blueland's currency unit, the blue, was worth $1.20 (U.S.) last year and is worth $0.90 (U.S.) this year. Redland's currency unit, the red, was worth $0.80 (U.S.) last year and is worth $0.60 (U.S.) this year. Consider Blueland as the home country. a. Calculate Blueland's nominal exchange rate with Redland. Instructions: Enter your response rounded to one decimal place. Last year: ___ red/blue This year: ___ red/blue The percentage change in Blueland's nominal exchange rate from last year to this year is: ___% (Instructions: Enter your response as a whole number. Be certain to enter "O" if required)
b. Calculate Blueland's real exchange rate with Redland. Instructions: Enter your response rounded to two decimal places. Last year: ___ red/blue This year: ___ red/blue The percentage change in Blueland's real exchange rate with Redland from last year to this year is: ___% ( Instructions: Enter your response rounded to two decimal places. Be certain to enter "O" if required). c. Relative to Redland, you expect Blueland's exports to be ___ by these changes in exchange rates.