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7. Theoretical Relationship # 3: Inflation and Exchange Rates; Purchasing Power Parity A. Explain the concept of 'purchasing power parity' (PPP) in your own words.

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7. Theoretical Relationship # 3: Inflation and Exchange Rates; Purchasing Power Parity A. Explain the concept of 'purchasing power parity' (PPP) in your own words. B. What are the requisite conditions for PPP to exist? C. What is the relationship between PPP and exchange rates

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