Purchasing Power Parity If the Current Spot Rate Between the U.S.dollar

question 78

Multiple Choice

Purchasing Power Parity If the current spot rate between the U.S.dollar and the Netherland Antilles guilder was $1 = 1.54 guilder,and if the inflation rate in the United States was 2 percent and in the Netherland Antilles it was 8 percent,then what would be the expected spot rate in one year?

• A)$0.6104
• B)$0.6494
• C)$1.4476
• D)$0.6133

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