(Answered) 1 if us inflation is 5 and uk inflation is 3 what should be

Finance

1. If U.S. inflation is 5% and U.K. inflation is 3%, what should be the approximate change in the value of the dollar, according to relative PPP?

2. At the start of the year, the exchange rate was $1.35/€. At the end of the year, the exchange rate is $1.43/€. If U.S. inflation was 5% and European inflation was 3%, what has been the nominal and real change in the value of the Euro (versus the USD)?

3. Given your answer to Q2, what has happened to European export industry competitiveness over the year?

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