In the Long Run

question 10

Multiple Choice

In the long run

• A) exchange rates obey relative PPP when all disturbances occur in the output markets.
• B) exchange rates obey absolute PPP when all disturbances occur in the output markets.
• C) exchange rates are unlikely to obey relative PPP when all disturbances occur in the output markets.
• D) exchange rates are unlikely to obey relative PPP when all disturbances are monetary in nature.
• E) exchange rates obey absolute PPP when all disturbances are monetary in nature.

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