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Question
Suppose that the current spot exchange rate of U.S. dollars for Russian rubles is $0.15/1ruble. The price of Russian-produced goods increases by 8 percent, and the U.S. price index increases by 3 percent.
According to PPP, the new exchange rate of Russian rubles to U.S. dollars is
A. 0.15.
B. 0.1425.
C. 0.141.
D. 0.1605.
E. 0.159.
Answer
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