The following information below is needed to answer the question in 3 parts. See bottom half.

1 a. the inflation rate in Canada for Calendar Year (CY) 2018;

b. the inflation rate in the U.S. rate of inflation for CY 2018;

c. spot exchange rate for the Canadian dollar per U.S. dollar on January 1, 2018;

d. spot exchange rate for the Canadian dollar per U.S. dollar on December 31, 2018.

Please give links or state references to your data sources. These data should be clearly displayed in a table.

Use the information obtained above to answer these 3 parts of the question.

- Use relative purchasing power parity to backcast, opposite of to forecast, the depreciation rate of the nominal exchange rate between the Canadian dollar per U.S. dollar for the period January 1, 2018 to December 31, 2018. (show your calculation)

- How much of the depreciation/appreciation of the Canadian dollar does the inflation differential explain? (show your calculation)

- Which violations, if any, of the assumptions of the theory of purchasing power parity would explain the failure of the inflation differential to explain 100 percent of the rate of depreciation of the nominal exchange rate? (provide a bullet list of these assumptions)