20. Suppose the current nominal exchange rate between the United States and the United Kingdom is 1.50 USD/GBP. According to the theory of Purchasing Power Parity (PPP), if over the next year the inflation rate in the United States is 5%, while the inflation rate in the United Kingdom is 2%. Assuming the real exchange rate remains constant, which of the following is the closest estimate for the new nominal exchange rate after one year?
(A)1.41 USD/GBP
(B)1.46 USD/GBP
(C)1.54 USD/GBP
(D)1.59 USD/GBP

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