Suppose That the Current Spot Exchange Rate of Canadian Dollars

Multiple Choice

Suppose that the current spot exchange rate of Canadian dollars for Russian rubles is $0.15/1ruble. The price of Russian-produced goods increases by 8 percent, and the Canadian price index increases by 3 percent. According to PPP, the new exchange rate of Russian rubles to dollars is

A) 0.15.
B) 0.1425.
C) 0.141.
D) 0.1605.
E) 0.159.