In Essence,PPP Theory Predicts That

question 103

Multiple Choice

In essence,PPP theory predicts that

• A) there is no relationship between changes in relative prices and changes in exchange rates.
• B) changes in relative prices will result in stability in exchange rates.
• C) stability in relative prices will result in a change in exchange rates.
• D) changes in relative prices will result in a change in exchange rates.
• E) changes in market barriers will result in changes in exchange rates

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