Question: please explain Question 21 5 pts Suppose you plan to vacation in Mumbai (India) one year from now. The cost of a hotel room in

please explain Question 21 5 pts Suppose you plan to vacation

please explain

Question 21 5 pts Suppose you plan to vacation in Mumbai (India) one year from now. The cost of a hotel room in Mumbai is currently INR 5,500 per night. However, room rates will change with Indian inflation over the next year. Inflation is expected to be 14% in India and 1.7% in the U.S. during the next one year. The current spot exchange rate is INR 75.00/USD 1. Based on PPP what should the spot exchange rate one year from now be? [Show answer clearly to 4 decimal places] 2. What is the US dollar-cost of a hotel room in Mumbai next year expected to be? (Show calculations clearly) 3. By what percent will the US dollar-cost of the vacation go up/down if you took a vacation in Mumbai one year from now relative to today? (Explain clearly) Edit Insert Format Tools Table 12pt Paragraph B I U ART

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