Suppose the demand for dollars (in exchange for euro) is given by the equation:
$D = 160 + 0.030 Y_{For} - 550 r_{For} + 700 r - 28 e_{nom}$
The supply of dollars is given by:
$S = 120 + 0.022 Y + 300 r_{For} - 600 r + 20 e_{nom}$
Suppose output and the real interest rate in the domestic country and the foreign country are:
$Y = 8,500, Y_{For} = 10,000, r = 0.060, r_{For} = 0.060$.
Calculate the equilibrium value of the nominal exchange rate. (In your calculations, carry out your intermediate steps to three
decimals and round your answer to three decimals).
$e_{nom} = $
