Question: Let ER stand for U.K. pound/$ exchange rate (i.e., the number of U.K. pounds per U.S. dollar) and RPR stand for the ratio of the

Let ER stand for U.K. pound/$ exchange rate (i.e., the number of U.K. pounds per U.S. dollar) and RPR stand for the ratio of the U.S. CPI/U.K. CPI. Is the correlation between ER and RPR expected to be positive or negative? Why? Show your computations. Would your answer change if you found correlation between ER and (1/RPR)? Why?
For Information: Refer to Table 1-3 in Problem 1.7.

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