Other Things the Same,according to Purchasing-Power Parity,if Over the Next

question 62

Multiple Choice

Other things the same,according to purchasing-power parity,if over the next few years Mexico has a higher money supply growth rate than the U.S. ,then

• A)prices in Mexico will rise by a larger percentage than in the U.S.So,the dollar will appreciate against the Mexican peso.
• B)prices in Mexico will rise by larger percentage than in the U.S.So,the dollar will depreciate against the Mexican peso.
• C)prices in Mexico will rise by a smaller percentage than in the U.S.So,the dollar will appreciate against the Mexican peso.
• D)prices in Mexico will rise by a smaller percentage than in the U.S.So,the dollar will depreciate against the Mexican peso.

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