In the spot market, $1 is currently equal to £.55.The expected inﬂation rate in the U.K.is 4 percent and in the U.S.3 percent.What is the expected exchange rate two years from now if relative purchasing power parity exists?

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The Answer of In the spot market, $1 is currently equal to £.55.The expected inﬂation rate in the U.K.is 4 percent and in the U.S.3 percent.What is the expected exchange rate two years from now if relative purchasing power parity exists?

In the Spot Market, $1 Is Currently Equal to £