Question
Assume the current spot rate between the UK and the U.S. is 0.637 per $1, the expected inflation rate in the U.S. is 1.78 percent,
Assume the current spot rate between the UK and the U.S. is 0.637 per $1, the expected inflation rate in the U.S. is 1.78 percent, and the expected inflation rate in the UK is 3.5 percent. If relative purchasing power parity exists, what will the exchange rate be next year?
Enter your answer rounded off to FOUR decimal points. Do not enter any currency symbol in th answer box.
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Public Finance In Canada
Authors: Harvey Rosen, Beverly George Dahlby, Roger Smith, Jean-Francois Wen, Tracy Snoddon
3rd Canadian Edition
0070951659, 978-0070951655
