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The future inflation rates for Australia and Germany for the next two years are expected to average 8 percent per year in Australia, and 6

The future inflation rates for Australia and Germany for the next two years are expected to average 8 percent per year in Australia, and 6 percent per year in Germany. If inflation in Australia over the next two years turns out to average 4% per year, and German inflation averages 3% per year, what is the real value of the euro in two years? Assume that the exchange rate in two years is AUD1.98/EUR.

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