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Under these conditions the real U.S.-Canada exchange rate, rounded to the nearest cent, is approximately

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Suppose the nominal U.S.-Canada exchange rate is $1.3 per Canadian Dollar

Suppose the nominal U.S.-Canada exchange rate is $1.3 per Canadian Dollar

Question
Suppose the nominal U.S.-Canada exchange rate is $1.3 per Canadian Dollar, the U.S. has a 5% inflation, and Canada has 0% inflation. Under these conditions the real U.S.-Canada exchange rate, rounded to the nearest cent, is approximately

Suppose the nominal U.S.-Canada exchange rate is $1.3 per Canadian Dollar

 
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