1. Which of the following statements about the Purchasing Power Parity (PPP) theory is FALSE?
   1. The exchange rate between currencies of two countries should be equal to the ratio of the price levels of a standard commodity basket in the two countries
   2. After experiencing hyper-inflation, a countrys currency is expected to depreciate against stable currencies.
   3. Once the absolute version of PPP is violated, the relative version of PPP will also be violated.
   4. Price disparities in nontradables are likely to persist for a long time.