Problem 2 Two countries, Great Britain and the US, produce just one ood beef Suppose that the price of beef in the US s 2.80 per pound, and in Britain it is 3.70 per pound (a) According to PPP theory, what should the S/E spot exchange rate be? b) Suppose the price of beef is expected to rise to $3.10 in the US, and to 4.65 in Britain. What should be the one year forward S/E exchange rate? (c) Given your answers to parts (a) and (b), and given that the current interest rate in the US is 10%, what would you expect current interest rate to be in Britain