If D = Depreciation of Country A's Currency Relative to B's

question 45

Multiple Choice

If d = depreciation of country A's currency relative to B's, pA = inflation in A and pB = inflation in B, the equation for PPP is:

• A) d = pA / pB.
• B) d = pA - pB.
• C) d = pA + pB.
• D) d = pA × pB.