Question: 1. Show, by using a graph, and briefly explain the international parity conditions in equilibrium. 2. Describe the relative purchasing power parity condition and comment

1. Show, by using a graph, and briefly explain the international parity conditions in equilibrium.
2. Describe the relative purchasing power parity condition and comment it in terms of short-run and long-run.

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1 Definition The parity conditions are equilibrium conditions that institute connection between financial prices P i S F in the nonappearance of arbit... View full answer

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