The Spot Exchange Rate for the British Pound Is $1

question 53

Multiple Choice

The spot exchange rate for the British pound is $1.60/£. The annual inflation rate in the U.S. is 4% compared to 8% in the U.K. What is the anticipated exchange rate at the end of the year if PPP is valid?

• A) $1.54/£
• B) $1.65/£
• C) $1.60/£
• D)$1.63/£

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Definitions:

Opium Poppy

A flowering plant from which opium and many other opiates are extracted, known scientifically as Papaver somniferum.

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A condition characterized by the frequent passage of loose or watery stools, often indicating an infection or irritation of the digestive system.

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An intense, urgent, or abnormal desire or longing, especially for a specific substance or experience.