Extensive Empirical Studies Have Shown That

Multiple Choice

Extensive empirical studies have shown that

A) there is only a short-run relationship between a country's relative inflation rates and changes in exchange rates; no long-run relationship exists.
B) there is a long-run relationship between a country's relative inflation rates and changes in exchange rates.
C) that there exists both short-run and long-run relationships between a country's relative inflation rates and changes in exchange rates.
D) a country's relative inflation rates and changes in exchange rates are not related to each other.