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1.In 1975 the Canada/US exchange rate was 1.02 (i.e., 1$US bought 1.02$C). The Canadian price level rose by 52% between 1975 and 1980, while the

1.In 1975 the Canada/US exchange rate was 1.02 (i.e., 1$US bought 1.02$C). The Canadian price level rose by 52% between 1975 and 1980, while the US price level rose by 41%. What does PPP predict is the 1980 exchange rate?

a) below 1.00b) between 1.00 and 1.10c) between 1.10 and 1.20d) above 1.20

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