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At the Beginning of the Year the Exchange Rate Between

Question 24

Multiple Choice

At the beginning of the year the exchange rate between the Brazilian real and the U.S. dollar was 2.2 reals per dollar. Over the year,Brazilian inflation was 12 percent and U.S. inflation was 4 percent. If purchasing power parity holds,at year-end the exchange rate should be approximately ________ dollars per real.


A) 2.3913
B) 0.4895
C) 2.8498
D) 0.4182
E) 0.3440

Correct Answer:

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