(Choose 1 answer)
If the annual inflation rate is 5.5 percent in the United States and 4 percent in the U.K., and the dollar depreciated against the pound by 3 percent, then the real exchange rate, assuming that PPP initially held, is
A. 0.07.
B. 0.9849.
C. -0.0198.
D. 4.5.
Exit 49
