Question: Assume the current exchange rate between the US dollar and the UK Pound Sterling is 0.6 (pounds per $). Assuming the purchase price parity theory

Assume the current exchange rate between the US dollar and the

Assume the current exchange rate between the US dollar and the UK Pound Sterling is 0.6 (pounds per \$). Assuming the purchase price parity theory holds, what is the new exchange rate (pounds per \$) if the price level in the US increases by 5% and the price level in the UK increases by 10%

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