4 Testing PPP. Inflation differentials between the United States and other industrialized countries have typically been a

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4 Testing PPP. Inflation differentials between the United States and other industrialized countries have typically been a few percentage points in any given year. Yet, in many years annual exchange rates between the corresponding currencies have changed by 10% or more. What does this information suggest about PPP?

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Exploring Economics

ISBN: 9780324395464

4th Edition

Authors: Robert L. Sexton

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