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Management · Q870

International Finance and Treasury

Graduate and Post Graduate · Management · question 870

Q870

If purchasing power parity were to hold even in the short run, then

A.
real exchange rates should tend to decrease over time
B.
quoted nominal exchange rates should be stable over time
Answer
C.
real exchange rates should tend to increase over time
D.
real exchange rates should be stable over time

Answer: Option B

Solution

Answer: Option B
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