Assume: Standard consumption bundle currently seeks for$25,000 in the U.S. and CAD 30,000 in Canada. the current

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Assume: Standard consumption bundle currently seeks for$25,000 in the U.S. and CAD 30,000 in Canada. the current exchange rate is CAD 1.1/ USD. Annual inflation rate is expected to be 3% in the U.S. and 5% in Canada.

Forecast S2 (CAD/USD), the future spot rate in2 years, based On PPP. Show work for full credit

1) S2 (CAD/USD) =?

2) work as follows :

Posted Date: Oct 14, 2021 02:02 PM

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Assume: Standard consumption bundle currently seeks for$25,000 in the U.S. and CAD 30,000 in Canada. the current

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Spot rate CAD 11USD Ius Inflation in US 3 Icad Inflation in CANADA 5 n ... View the full answer

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