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Suppose that S = $1.1045/. The inflation rate is 5% in the US and 3% in Germany. The real exchange rate is expected to increase
Suppose that S = $1.1045/. The inflation rate is 5% in the US and 3% in Germany. The real exchange rate is expected to increase by 4%. What is the exact currency movement for the euro? Do not write any symbol. Express your answers as a percentage. Make sure to round your answers to the nearest 100th decimal point. For example, write 2.45 for 2.45%.
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