The major things to remember about relative purchasing power ...

[WWatsford]

The major things to remember about relative purchasing power parity are:
 a. Long-run changes in the value of a nation's currency value depend on the country's inflation rate relative to foreign nations, and short-term exchange rate changes depend mainly on interest parity relationships.
  b. The higher a nation's relative inflation, the higher its currency value will be, and long-run changes in the value of a nation's currency value depend mainly on the country's inflation rate relative to foreign nations.
  c. The higher a nation's relative inflation, the lower its currency value will be, and long-run changes in the value of a nation's currency value depend on the country's inflation rate relative to foreign nations.
  d. Changes in relative international money supplies are the major cause of short-run exchange rate movements, and long-term exchange rate changes depend mainly on interest parity relationships.
  e. None of the above

Question 2

Exchange rates should change whenever a nation's:
 a. Relative expectations change.
  b. Relative income changes.
  c. Relative interest rates change.
  d. Relative price level changes.
  e. All of the above are true.

[wergv]

Answer to Question 1

.C

Answer to Question 2

.E

[WWatsford]

TYSM

[elyse44]

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