TRUE/FALSE. Provide brief explanation to justify your answer

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.

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

3. The J-curve illustrates the long-term effects of depreciation on the current account. [diagram required]