Suppose Russia's Inflation Rate Is 200% Over One Year but the Inflation

question 6

Multiple Choice

Suppose Russia's inflation rate is 200% over one year but the inflation rate in Switzerland is only 2%.According to relative PPP,

• A) the Russian ruble should depreciate against Swiss franc by 198 percent.
• B) the Russian ruble should appreciate against Swiss franc by 198 percent.
• C) the Russian ruble should depreciate against Swiss franc by 202 percent.
• D) the Russian ruble should appreciate against Swiss franc by 202 percent.