If the Home Inflation Rate Is 9% and the Foreign

question 43

Multiple Choice

If the home inflation rate is 9% and the foreign inflation rate is 5%, then by relative purchasing power parity the home country would expect is exchange rate to:

• A)rise in value by 5%.
• B)fall in value by 5%.
• C)rise value by 4%.
• D)fall in value by 4%.

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Definitions:

Depression

A mood disorder typified by ongoing dejection or indifference toward life’s activities, profoundly impairing everyday functionality.

Mania

A mental state characterized by excessively high energy levels, euphoria, hyperactivity, and sometimes delusions of grandeur, often seen in bipolar disorder.

Schizophrenic Person

An individual diagnosed with schizophrenia, a mental disorder characterized by disruptions in thought processes, perceptions, emotional responsiveness, and social interactions.

Catatonic

A state often seen in severe psychiatric conditions marked by either immobility or excessive motor activity, sometimes with peculiar posturing.