Question
The inflation rate in Mexico is 5% and the inflation rate in the US is 2%. For relative PPP to hold the nominal exchange rate
The inflation rate in Mexico is 5% and the inflation rate in the US is 2%. For relative PPP to hold the nominal exchange rate (dollars per peso) should:
| Decline by 4%. | ||
| Decline by 3%. | ||
| Increase by 3%. | ||
| Increase by 4%. |
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Essentials of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
10th edition
77835425, 978-0077835422
