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Suppose annual inflation rates in the u.s. and mexico are expected to be 1% and 80%, respectively, over the next several years. if the current spot rate for the mexican peso is 0.002 $ /ps, then relative purchasing power parity suggests that the peso’s value in 3 years will be approximately ______.

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BlueSky06
The answer to this question is $0.00102. Suppose annual inflation rates in the United States and in the  Mexico are expected to be 1% and 80%, respectively, over the next several years. if the current spot rate for the Mexican peso is 0.002 $ /ps, then the relative purchasing power parity suggests that the peso’s value in 3 years will be approximately $0.00102.

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