Currently, You Can Exchange $1 for Sf1

question 29

Multiple Choice

Currently, you can exchange $1 for Sf1.14. Assume that the average inflation rate in the U.S. over the next two years will be 2.5 percent annually as compared to 3 percent in Switzerland. Based on this information and relative purchasing power parity, which one of the following assumptions can you make regarding the next two years?

• A) The Swiss franc will appreciate against all currencies.
• B) The Swiss franc will appreciate against the U.S. dollar.
• C) The U.S. dollar will appreciate against all currencies.
• D) The U.S. dollar will appreciate against the Swiss franc.
• E) Both the U.S. dollar and the Swiss franc will appreciate against all other currencies.

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Definitions:

Paired Comparison

A technique used in performance appraisals where employees are compared with each other in pairs, to rank individuals in terms of performance.

Classification/Grading

A job evaluation approach where positions are grouped into categories or grades based on similar duties, responsibilities, and qualifications requirements.

Job Evaluation

A systematic process used to determine the relative worth of jobs within an organization to establish fair and equitable pay.

Ontario Pay Equity Act

Legislation aimed at reducing gender pay disparities by requiring equal pay for work of equal value in Ontario, Canada.