Question: Relative PPP predicts that inflation differences between two countries will have an equal impact on their exchange rate. all else equal, the increase in the
Relative PPP predicts that
inflation differences between two countries will have an equal impact on their exchange rate.
all else equal, the increase in the inflation rate of one country will cause its interest rate to decrease
all else equal, the increase in the inflation rate of one country will cause its interest rate to increase
all else equal, the increase in the inflation rate of one country will cause its currency to appreciate
identical goods should sell for identical prices in different markets.
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