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Inflation rate in british pound

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Reference no: EM133372683

Question

1. If the inflation rate in the British pound versus the US $ is 14% , while the exchange rate is 1 pound exchanges for $1.25 presently, if the future spot rate is$1.15, what is the US inflation rate?

2. What is the meaning of the above in the context of PPP? Specifically, you have to connect your results to PPP.

Reference no: EM133372683

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