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  3. Study Set
    International Financial Management Study Set 1
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    Exam 8: Relationships among Inflation, Interest Rates, and Exchange Rates
  5. Question
    Given a Home Country and a Foreign Country, Purchasing Power
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Given a Home Country and a Foreign Country, Purchasing Power

Question 3

Question 3

Multiple Choice

Given a home country and a foreign country, purchasing power parity suggests that:


A) the inflation rates of both countries will be the same.
B) the nominal interest rates of both countries will be the same.
C) A and B
D) none of the above

Correct Answer:

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