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    Principles of Economics Study Set 1
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    Exam 28: Exchange Rates and the Open Economy
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    Based on the Theory of Purchasing Power Parity, in the Long
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Based on the Theory of Purchasing Power Parity, in the Long

Question 94

Question 94

Multiple Choice

Based on the theory of purchasing power parity, in the long run, currencies of countries with significant inflation will tend to:


A) be flexible.
B) have nominal exchange rates.
C) depreciate.
D) appreciate.

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