Question: 2 Explaining exchange rate behavior in the long run assumes that changes in price levels and real interest rates affect nominal exchange rates so that

2 Explaining exchange rate behavior in the long run assumes that changes in price levels and real interest rates affect nominal exchange rates so that interest parity and PPP hold. Short-run deviations from FPP may be explained by an alternative theory called the: 3- relative FFF' approach. [3- asset approach to exchange rate determination. C- long-run equilibrium approach. {1- lavv of one price

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