In addition to testing for purchasing power parity (PPP) by plotting individual points (combinations of interest rate differentials and changes in the spot rate of the "foreign currency between two countries) on a graph, you can also test for PPP using regression analysis. In particular, consider the following regression model: ef=40+ (1#!; - 1) +4 Where ef is the percentage change in the foreign currency value. It is the inflation rate of the home currency, and It is the inflation rate of the foreign currency. do and ai are coefficients to be estimated, while fl is the error term. True or False: Results of this regression analysis will be the same, regardless of the base period chosen. True False Which of the following factors influence the exchange rate of a currency? Check all that apply. O Changes in relative inflation rates Changes in expectations of future exchange rates O Changes in relative interest rates Changes in government controls Changes in relative income levels relative inflation, exchange rate movements be Because the exchange rate for a currency is influenced predicted entirely by PPP