According to Relative Purchasing Power Parity,if Belgian Prices Are Increasing

question 49

Multiple Choice

According to relative purchasing power parity,if Belgian prices are increasing 10% faster than Japanese prices,

• A) the yen should fall 10% versus the Belgian franc.
• B) the yen should rise 10% versus the Belgian franc.
• C) prices in Belgium should fall 10%.
• D) prices in Japan should rise 10%.
• E) prices in Japan will rise 5% and the yen will rise 5%.

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