Assume: annual inflation rate is 3.5% in the U.S. and 1.5% in the U.K.; the current...

 

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Assume: annual inflation rate is 3.5% in the U.S. and 1.5% in the U.K.; the current spot rate is $1.50/ Calculate the price of USD 1year from now based on relative PPP. Write your answer as a number with 4 digits after the decimal point, e.g. *.1234. 0.6538/$ Assume: annual inflation rate is 3.5% in the U.S. and 1.5% in the U.K.; the current spot rate is $1.50/ Calculate the price of USD 1year from now based on relative PPP. Write your answer as a number with 4 digits after the decimal point, e.g. *.1234. 0.6538/$

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The Relative Purchasing Power Parity PPP formula can be used to calc... View the full answer