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Business, 11.12.2019 07:31 pam93

According to the european central bank, the one-year ahead projected inflation rate for the europe monetary union is 1.7 percent. similarly, the federal reserve bank projects the one-year ahead u. s. inflation rate to be 2.22 percent. assuming that the current spot rate e€,$ = 1.138, use the inflation differential and the monetary approach to exchange rates to forecast the one-year ahead spot exchange rate. explain your answer. based on your answer, do you expect the dollar to appreciate or depreciate in value against the euro?

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