Suppose the exchange rate at the beginning of the year between the Indian Rupee (R) and U.S. dollar is R43.125/$. The annual inflation rate in India is 19 percent whereas inflation in the United States is 3 percent. What would be the new exchange rate at the end of the year?
A) R49.8224/$
B) R37.327/$
C) R0.0267/$
D) $37.327/R
Correct Answer:
Verified
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