The nominal exchange rate is 3 Malaysian ringgits per dollar. The real exchange rate is 8/5 . If a Big Mac costs 7.5 ringgits in Malaysia, how much does a Big Mac cost in the U.S.? Show your work

If demand is price elastic,

A) a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent. B) a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent. C) a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent. D) the price is very sensitive to any shift of the supply curve.

If the rate of inflation in the economy is steady at 5 percent per year, how does the short-run Phillips curve predict that the unemployment rate will be changing, if at all? Does your answer change if inflation in the economy is 0 percent?

Illustrate your answer with a Phillips curve.