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The US Inflation Rate Is Expected to Be 4 Percent Over

Question 19

Multiple Choice

The U.S. inflation rate is expected to be 4 percent over the next year, while the European inflation rate is expected to be 3 percent. The current spot rate of the euro is $1.03. Using purchasing power parity, the expected spot rate at the end of one year is $____.


A) 1.02
B) 1.03
C) 1.04
D) None of these are correct.

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