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B. 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

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B- 1)If the inflation rate in the British pound versus the US $ is 14-.docx

  • 1. B. 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