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Suppose that today's exchange rate is $1.50 per pound, the U.S. inflation rate is 8 percent, and the British inflation rate is 6 percent. According
Suppose that today's exchange rate is $1.50 per pound, the U.S. inflation rate is 8 percent, and the British inflation rate is 6 percent. According to the purchasing power parity theory, over the long run the new exchange rate between the dollar and pound will be $1.56 per pound O $1.42 per pound O $1.53 per pound O $1.47 per pound
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