Multiple Choice
At the beginning of 2002 the AUD/USD exchange rate was 1.9585 and the 2002 inflation rates were 3.10% for Australia and 2.33% for the US.
What should the AUD/USD exchange rate have been at the end of 2002, according to PPP theory?
A) USD/AUD 0.5068
B) AUD/USD 1.9439
C) AUD/USD 1.9732
D) none of the given answers
Correct Answer:
Verified
Correct Answer:
Verified
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