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Sir I have a doubt
I would like to know.. when we have to find exchange rates and we use inflation rates of home currency and foreign currency .. we always divide .. foreign inflation divided by home country inflation right.. in all situations.. or are there situations when the home country inflation rate is the numerator and the foreign country inflation rate is denominatorIt depends which way round the exchange rate is quoted.
Hb in the formula is inflation rate for the currency against which the other currency is quoted. Hc is the inflation rate for the other currency.
I do explain this, with examples, in my free lectures one change rate determination.
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