Question 7 20 pts 3A. 20 points. The Mexican inflation rate is 3.42 per year. One year ago the spot exchange rate was 0.22 BRL (Brazilian Reals) per MXN (Mexican Pesos). Today it is 0.28 BRL (Brazilian Reals) per MXN (Mexican Pesos). If the Law of One Price holds, what should the yearly inflation rate in Brazil be? Please give your answer as a decimal out to four places - ie, 3.99% would be 0.0399 0.3163 Question 8 10 pts 3B. 10 points. Given the differences between the inflation rate you determined above, and the actual Brazilian inflation rate of 2.91%, is it more likely that the Brazilian government is taking actions to make BRL more expensive or cheaper? (Hint: Think about what the BRL should cost today if inflation is 2.91% in Brazil) Edit View Insert Format Tools Table 12pt Paragraph BIU A Q V T V 0.22 BRL per peso OCT 2 25