If Over the Next Six Months Inflation Is Higher in the U.S.than

question 56

Multiple Choice

If over the next six months inflation is higher in the U.S.than in foreign countries,then according to purchasing-power parity

• A)only the nominal exchange rate depreciates.
• B)both the real and nominal exchange rate appreciate.
• C)both the real and nominal exchange rate depreciate.
• D)only the real exchange rate appreciates.

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