Suppose That the Current Spot Exchange Rate of U

question 12

Multiple Choice

Suppose that the current spot exchange rate of U.S. dollars for Russian rubles is $0.15/1ruble. The price of Russian-produced goods increases by 8 percent, and the U.S. price index increases by 3 percent.
-According to PPP, the new exchange rate of Russian rubles to U.S. dollars is

• A)0.15.
• B)0.1425.
• C)0.141.
• D)0.1605.
• E)0.159.

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