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Which of the following statements is correct? A domestic currency maintains its purchasing power parity if: O Its real exchange rate decreases over time. If

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Which of the following statements is correct? A domestic currency maintains its purchasing power parity if: O Its real exchange rate decreases over time. If it appreciates by an amount equal to the excess of foreign inflation over domestic. o It depreciates by an amount equal to the excess of foreign inflation over domestic. O Its real exchange rate increases over time. O Its average exchange rate remains constant over time

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