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1. Did the US dollar appreciate or depreciate in general versus the Columbian peso between 1990 and 2003? What does this imply about the inflation rate in the US and Columbia during this time according to our long term exchange rate theory in the course? Was Columbian inflation higher or lower than US inflation in practice?Note: you will need to find data on the inflation rate in Columbia in order to complete this exercise. The most convenient source of this data is the World Bank’s World Development Indicators. The US inflation rate and the exchange rate between the dollar and the Columbian peso are available through FRED.

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