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Your family is planning a ski vacation to Mt . Blanc in Chamonix, France, one year from now. Your family is based in the U
Your family is planning a ski vacation to Mt Blanc in Chamonix, France, one year from now. Your family is based in the US and your home currency is the US dollar. Since this is a foreign currency expenditure, your parents have entrusted the budgeting in your expert hands. The chateau's owner wishes to preserve his real income against both inflation and exchange rate changes. So the present monthly rent of will be adjusted upwards or downwards for any change in the French cost of living between now and then. You are basing your budgeting on purchasing power parity PPP French inflation is expected to average at for the coming year, while the inflation in the US is expected to be at The current spot rate is $
By what percent will the dollar cost go up between now and next year? Show with calculation.
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