a. Indicate whether the following statement is True of False. (4 marks)

i) The real exchange rate is not equal to 1, if the absolute purchasing power parity is not violated.

ii) The real exchange rate is not constant over time, if the relative purchasing power parity is not violated.

iii) The deviation from absolute purchasing power parity is constant in percentage, if the relative purchasing power parity is violated.

iv) The real exchange rate will fluctuate from time to time, if the deviation from absolute purchasing power parity varies over time.