Question: two countries and two goods. time t and time t+1 p1 at t is 8 dollars, 10 dollars at t+1 p2 at t is 4

two countries and two goods.

time t and time t+1

p1 at t is 8 dollars, 10 dollars at t+1

p2 at t is 4 dollars, 5 dollars at t+1

assume commodity price parity, what is the foreign currency price of the two goods at the points in time? what's the domestic inflation rate? what's the foreign inflation rate?

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