Question: 5. What are the differences between Absolute Purchasing-Power Parity and Relative Purchasing-Power Parity? (5%) If purchasing power parity holds, what is the annual rate

5. What are the differences between "Absolute Purchasing-Power Parity" and " Relative Purchasing-Power Parity"? (5\%) If purchasing power parity holds, what is the annual rate of change of the domestic price level when the foreign inflation rate is 3 percent per year and the domestic currency is depreciating against the foreign currency at 7 percent per year ? (5%)

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