Multiple Choice
_____ On 1/1/06, the direct exchange rate was $.60. On 12/31/06, the direct exchange rate was $.39. During 2001, the United States had 6% inflation, and the foreign country had 20% inflation. How much of the change in the exchange rate was the result of domestic inflation?
A) $.10
B) $(.10)
C) $.03
D) $(.03)
E) $(.14)
Correct Answer:
Verified
Correct Answer:
Verified
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