Multiple Choice
Which of the following statements is false?
A) The purchasing power parity (PPP) holds in the long-run.
B) Higher the real exchange rate of US dollars, higher is the net exports from Canada.
C) If the purchasing power parity (PPP) holds and if the inflation rate in Canada is higher than that in USA, the nominal exchange rate of US dollars will decrease.
D) If the purchasing power parity (PPP) holds in the long-run, the real exchange rate will be one.
Correct Answer:
Verified
Correct Answer:
Verified
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