content area top Part 1 Suppose the exchange rates between the United States and Canada are in longminusrun equilibrium as defined by the idea of purchasing power parity. If the law of one price holds perfectly, then differences between U.S. and Canadian rates of inflation would Question content area bottom Part 1 A. have no effect on nominal exchange rates. B. be completely offset by changes in the nominal exchange rate. C. lead to a change in the real purchasing power of each country's currency when it is converted to the other country's currency. D. be completely offset by changes in the real exchange rate