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Consider the following data: Date Exchange rate January 2017 EURUSD 1.100 December 2017 EURUSD 1.144 Take the US dollar as the home currency a. According

Consider the following data:

Date Exchange rate

January 2017 EURUSD 1.100

December 2017 EURUSD 1.144

Take the US dollar as the home currency

a. According to Purchasing Power Parity which currency area should have had the

higher rate of inflation in 2017 and by how much?

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