Multiple Choice
If the annual inflation rate is 2.5 percent in the United States and 4 percent in the U.K.,and the dollar appreciated against the pound by 1.5 percent,then the real exchange rate,assuming that PPP initially held,is ________.
A) parity
B) 0.9710
C) −0.0198
D) 4.5
Correct Answer:
Verified
Correct Answer:
Verified
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