Assume $1 Is Currently Equal to £

question 8

Multiple Choice

Assume $1 is currently equal to £.7658. Also assume the expected inflation rate in the U.K. is 3.6 percent while it is 3.3 percent in the U.S. What is the expected exchange rate four years from now if relative purchasing power parity exists?

• A) £.7750
• B) £.7635
• C) £.7681
• D) £.7623
• E) £.7567

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Definitions:

Information

Data that has been processed, organized, or structured in a way that adds context or meaning, making it useful for decision-making.

Local Unemployment

The percentage of the workforce that is not employed within a specific geographical area.

National Unemployment

The percentage of the labor force that is unable to find employment, considered an important indicator of the economic health of a country.

Average Age

The mean age of a specific group or population, calculated by dividing the sum of individual ages by the number of individuals.