4 Assume that the Canadian dollars spot rate is 0.57 and that the Canadian and US inflation...

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4 Assume that the Canadian dollar’s spot rate is £0.57 and that the Canadian and US inflation rates are similar.

Then assume that Canada experiences 4% inflation, while the United Kingdom experiences 3%

inflation. According to PPP, what will be the new value of the Canadian dollar after it adjusts to the inflationary changes? (You may use the approximate formula to answer this question.)

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ISBN: 9780324395464

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Authors: Robert L. Sexton

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Question Posted: Oct 28, 2024 05:01 AM

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4 Assume that the Canadian dollars spot rate is 0.57 and that the Canadian and US inflation...

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