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Estimating Depreciation Due to PPP. Assume that S t = 1.10 GBPUSD. According to PPP, how will this spot rate adjust after one year if

Estimating Depreciation Due to PPP. Assume that St = 1.10 GBPUSD. According to PPP, how will this spot rate adjust after one year if the United Kingdom experiences an inflation rate of 4% while the U.S. experiences an inflation rate of 3%?

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