Question: TRUE or FALSE with brief explanation Under PPP (and by the Fisher Effect), A rise in a countrys expected inflation rate will eventually cause a

TRUE or FALSE with brief explanation

  1. Under PPP (and by the Fisher Effect), A rise in a countrys expected inflation rate will eventually cause a less than proportional rise in the interest rate that depositors of its currency offer to accommodate the rise in expected inflation.

  1. The Marshall-Lerner Condition states that the sum of import and export elasticities must be equal to one in order for depreciation to occur.

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