Question: Suppose the exchange rate between the U . S . dollar and the Turkish Lira is initially 2 9 . 1 4 TRY per dollar.

Suppose the exchange rate between the U.S. dollar and the Turkish
Lira is initially 29.14 TRY per dollar. According to purchasing-power
parity, if the price of traded goods next year rises by 35 percent in the
Turkey and remains constant in U.S, what will be the exchange rate
next year?

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