Suppose that the Swiss franc appreciates from US$0.40 at the beginning of the year to US$0.44 at the end of the year. The US inflation rate is 5 percent and the Swiss inflation rate is 3 percent during the year.

2. Analyze the inflation rate observed in both the countries and find the percentage appreciation of the Swiss franc?

3. Analyze the situation in the country to find the dollar price of the Swiss franc be in one year?

4. Analyze the situation to find the real depreciation (-) or real appreciation of the Swiss franc during the year?