QUESTION $7$

If the GDP deflator in the United States is $114,$ and the GDP deflator in Ukraine is $142,$ which of the following exchange rates would the theory of purchasing power parity predict in the long run? $($The Ukrainian currency is the hryvnia.$)$

$0\mathrm{.}80$ hryvnias per dollar

$1\mathrm{.}25$ hryvnias per dollar

$2\mathrm{.}80$ hryvnias per dollar

$28$ hryunias per dollar