suppose expected inflation is 4% in the united kingdom and 1 % in the united states . if the relative ppp holds , the market would expect the paund to (a) deapreciate by 3% against the dollar (b) deapreciate by 8% against the dollar (c) appreciate by 3% against the dollar (d) appreciate by 5% against the dollar
suppose expected inflation is 4% in the united kingdom and 1 % in the united states . if the relative ppp holds , the market would expect the paund to (a) deapreciate by 3% against the dollar (b) deapreciate by 8% against the dollar (c) appreciate by 3% against the dollar (d) appreciate by 5% against the dollar
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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suppose expected inflation is 4% in the united kingdom and 1 % in the united states . if the relative ppp holds , the market would expect the paund to
(a) deapreciate by 3% against the dollar
(b) deapreciate by 8% against the dollar
(c) appreciate by 3% against the dollar
(d) appreciate by 5% against the dollar
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