Problem

Purchasing Power Parity. Suppose the rate of inflation in Russia will run about 3 percent...

Purchasing Power Parity. Suppose the rate of inflation in Russia will run about 3 percent higher than the U.S. inflation rate over the next several years. All other things being the same, what will happen to the ruble versus dollar exchange rate? What relationship are you relying on in answering?

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Solutions For Problems in Chapter 18