If Prices in the United States Rise Less Rapidly Than

question 75

Multiple Choice

If prices in the United States rise less rapidly than in Canada,which of the following would be expected according to purchasing power parity?

• A) The value of the Canadian dollar will decline, relative to the U.S. dollar.
• B) The value of the U.S. dollar will decline, relative to the Canadian dollar.
• C) Inflation will increase in Canada.
• D) The price of gold will decline.

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Definitions:

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