Multiple Choice
If the annual inflation rate is 5.5 percent in the United States and 4 percent in the U.K.,and the dollar depreciated against the pound by 3 percent,then the real exchange rate,assuming that PPP initially held,is
A) 0.07.
B) 0.9849.
C) −0.0198.
D) 4.5.
Correct Answer:
Verified
Correct Answer:
Verified
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