Question
If the nominal exchange rate of Canadian dollar (US$/C$) is $0.9850 and the expected inflation rates in Canada and the US are 4% and 3%
If the nominal exchange rate of Canadian dollar (US$/C$) is $0.9850 and the expected inflation rates in Canada and the US are 4% and 3% respectively, then one-year forecast for Canadian dollar under the relative version of the PPP would be:
| A. | $0.9700 | |
| B. | $0.9946 | |
| C. | $0.9755 | |
| D. | $0.9850 |
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Macroeconomics
Authors: Olivier Jean Blanchard
8th Edition
0134897897, 978-0134897899
