Question: Explain. 1. Absolute PPP and Relative PPP 2. Triangular Arbitrage andits role in ensuring an efficient foreign exchange market. 3. Differntiate between absolute and relative

Explain.

1. Absolute PPP and Relative PPP

2. Triangular Arbitrage andits role in ensuring an efficient foreign exchange market.

3. Differntiate between absolute and relative versions of purchasing power parity? Which one of them makes more economic sense? Why?

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