Question: Let e t be the real exchange rate and t be the nominal exchange rate at time t . P t and P t *

Let et be the real exchange rate and t be the nominal exchange rate at time t.Pt and Pt** are the domestic and foreign consumer price index at the time t. is the change over time. Please answer the following True of False questions.
(1) Relative PPP holds if et=0.
(2) When et>0, the domestic country becomes less expensive.
(3) When et0, the foreign country becomes more expensive.
Let e t be the real exchange rate and t be the

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