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Homework answers / question archive / Suppose the annual rate of inflation in Brazil (BRL) is 8
Suppose the annual rate of inflation in Brazil (BRL) is 8.50%, and the annual rate of inflation in Argentina (ARS) is 15.91%. If the ARS appreciates relative to the BRL by 4.32% in real terms, then which of the following would be correct?
O a. Nominal exchange rate appreciation by 11.44%.
O b. Nominal exchange rate depreciation by 2.35%.
O c. Nominal exchange rate appreciation by 12.82%.
O d. Nominal exchange rate depreciation by 4.18%.
O e. None of the options in this question are correct.
