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The following graph plots the percentage change in the spot rate for a foreign currency along the horizontal axis, while measuring the inflation rate differential

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The following graph plots the percentage change in the spot rate for a foreign currency along the horizontal axis, while measuring the inflation rate differential (between a home country and a foreign country) along the vertical axis. in refers to the inflation rate in the home country, while if refers to the inflation rate in a foreign country. On the following graph, use the blue line (circle symbol) to plot the combinations of percentage change between the forelign currency spot rate and inflation rate differential that are consistent with purchasing power parity (PPP). The following graph shows the PPp line in blue along with several hypothetical points, A through E, that represent combinations of infiation rate differentials and associated percentage changes in the spot rate of the foreign currency. Use the greph to fill in the table that follows. For each point on the previous graph, use the table to indicate whethtr purchasing power parity exists, or whether purchasing power is more favorable for foreign or domestic products. Note: Assume there are no transaction costs, The following graph plots the percentage change in the spot rate for a foreign currency along the horizontal axis, while measuring the inflation rate differential (between a home country and a foreign country) along the vertical axis. in refers to the inflation rate in the home country, while if refers to the inflation rate in a foreign country. On the following graph, use the blue line (circle symbol) to plot the combinations of percentage change between the forelign currency spot rate and inflation rate differential that are consistent with purchasing power parity (PPP). The following graph shows the PPp line in blue along with several hypothetical points, A through E, that represent combinations of infiation rate differentials and associated percentage changes in the spot rate of the foreign currency. Use the greph to fill in the table that follows. For each point on the previous graph, use the table to indicate whethtr purchasing power parity exists, or whether purchasing power is more favorable for foreign or domestic products. Note: Assume there are no transaction costs

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