Country A and Country B are members of a monetary union and share a common currency. The current ratio of Country B's domestic price level to Country A's domestic price level (P_B / P_A) is 1.2. If both countries experience an identical inflation rate of 3% over the next year, what will the new ratio of their price levels be?
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Country A and Country B are members of a monetary union and share a common currency. The current ratio of Country B's domestic price level to Country A's domestic price level (P_B / P_A) is 1.2. If both countries experience an identical inflation rate of 3% over the next year, what will the new ratio of their price levels be?