3. Does purchasing power parity exist? In addition to testing for purchasing power parity (PPP) by plotting individual points (combinations of interest rate ditterentials and changes in the ipot) rate of the Yoreign" currency between two countries) en a graph, you can atso test for ppp using regression analyss, in particular, consider the following regression modely cr=a0+a1(1+11+141)+ Where ef is the percentage change in the foregn currency value, h is the inflation rate of the home currency, and l is the infistion rate of the foreign curtency, da and aj are coefficients to be estimated, while is the error term. Thue of fase: Results of this regression analysis will be the same, regardless of the base period chosen. True False Which of the foliowing factorsinfluence the exchange rate of a currency? Check all that appity: Chenges in relative inflation rates Changes in relative interest rates Changes in relative income levels Changes in expectations of future exchange rates Changes in government controls Because the exchacge rate for a currency is influenced relative inflation, exchinge rate mevements be predicted entirely by PPP