Identify the inflation rate India and USA. Then identify the percentage change of your home currency with respect to that foreign country. Did the currency change in the direction and by the magnitude that you would have expected according to PPP? If not, offer possible reasons for this discrepancy. India Inflation rate = 5.3% USA inflation rate = 7% Spot rate = 74.86 Rs
Identify the inflation rate India and USA. Then identify the percentage change of your home currency with respect to that foreign country. Did the currency change in the direction and by the magnitude that you would have expected according to PPP? If not, offer possible reasons for this discrepancy. India Inflation rate = 5.3% USA inflation rate = 7% Spot rate = 74.86 Rs
Chapter8: Relationships Among Inflation, Interest Rates, And Exchange Rates
Section: Chapter Questions
Problem 4ST
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Identify the inflation rate India and USA. Then identify the percentage change of your home currency with respect to that foreign country. Did the currency change in the direction and by the magnitude that you would have expected according to PPP? If not, offer possible reasons for this discrepancy.
India Inflation rate = 5.3% USA inflation rate = 7% Spot rate = 74.86 Rs
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