The business section of most major newspapers contains a table showing exchange rates amongst many countries, as does The Economist. Find such a table (or find The Economist table on their website) and use it to answer the following questions.

a. Does this table show nominal or real exchange rates?

Explain.

b. What are the exchange rates between the euro and the UK pound, and between the UK pound and the US dollar? Calculate the exchange rate between the euro and the dollar.

c. If UK inflation exceeds European inflation over the next year, would you expect the UK pound to appreciate or depreciate relative to the euro?