Question: 5 PPP 20 points Suppose that you have the following data on exchange rates: 2013 2014 2015 2016 2017 2018 0.8 0.83 0.85 0.88

5 PPP 20 points Suppose that you have the following data on

exchange rates: 2013 2014 2015 2016 2017 2018 0.8 0.83 0.85 0.88

5 PPP 20 points Suppose that you have the following data on exchange rates: 2013 2014 2015 2016 2017 2018 0.8 0.83 0.85 0.88 0.85 0.87 P 100 104 108 113 114 119 pF c,'0AP %APF Real Rate 100 102 105 107 109 a) b) c) (7 points) Complete the table (5 points) Was inflation higher domestically or in the foreign cuntry during the sample period? How do you know? (8 points) For what year does relative PPP hold the best? How do you know?

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