Question
If inflation is 2% in the U.S. and 4% in Norway, then according to relative purchasing power parity, a. the U.S. nominal exchange rate (E
If inflation is 2% in the U.S. and 4% in Norway, then according to relative purchasing power parity,
| a. | the U.S. nominal exchange rate (E $/Norway) will be rising by 2% per year | |
| b. | the U.S. nominal exchange rate will be falling by 2% per year | |
| c. | the U.S. real exchange rate (q U.S./Norway) will be rising by 2% per year | |
| d. | the U.S. real exchange rate will be falling by 2% per year |
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Exploring Economics
Authors: Robert L Sexton
5th Edition
978-1439040249, 1439040249
