? 1 7 PPP 6 B * 5 4 3 2 1 (%) -4! 0 D * ++ -3 un -6 -2 6 7 -7 -6 -5 -4 -3 -1 1 2 3 4 5 Change in Foreign Currency Spot Rate (%) For each point on the previous graph, use the table to indicate whether purchasing power parity exists, or whether purchasing power is more favorable for foreign or domestic products. Note: Assume there are no transaction costs. Points Purchasing Power More Favorable for Foreign Products Purchasing Power Parity (PPP) Purchasing Power More Favorable for Domestic Products Point A Point B Point C Point D OO Point E ? 1 7 PPP 6 B * 5 4 3 2 1 (%) -4! 0 D * ++ -3 un -6 -2 6 7 -7 -6 -5 -4 -3 -1 1 2 3 4 5 Change in Foreign Currency Spot Rate (%) For each point on the previous graph, use the table to indicate whether purchasing power parity exists, or whether purchasing power is more favorable for foreign or domestic products. Note: Assume there are no transaction costs. Points Purchasing Power More Favorable for Foreign Products Purchasing Power Parity (PPP) Purchasing Power More Favorable for Domestic Products Point A Point B Point C Point D OO Point E