The PPP Theory Seems to Best Predict Exchange Rate Changes

question 89

Multiple Choice

The PPP theory seems to best predict exchange rate changes for countries with

• A)very low rates of inflation and developed capital markets.
• B)very low rates of inflation and underdeveloped capital markets.
• C)very high rates of inflation and underdeveloped capital markets.
• D)very high rates of inflation and developed capital markets.
• E)low rates of inflation and underdeveloped capital markets

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