Problem 4 Using the indirect quotation, the exchange rate between Canadian and Australian dollars was set as following: CS / AS = 1.0171 at the beginning of the year. Monthly inflation in Australia is 0.2%. What should the annual inflation in Canada be so that the purchasing power parity would hold, considering the exchange rate in three months at the level of CS /AS = 1.0164. Prices in both countries are increasing with equal rates within any particular time period. ECON 420 - International Economics. Spring 2024. Problem Bundle 4 Problem 5 Interest rate in France equals 1.85%. Expected inflation is 0.8 %. Define the real interest rate in the economy