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    Principles of Macroeconomics Study Set 8
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    Exam 18: Open Economy Macroeconomics Basic Concepts: A First Theory of Exchange-Rate Determination Purchasing-Power Parity
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    According to Purchasing-Power Parity,if Prices in the United States Increase
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According to Purchasing-Power Parity,if Prices in the United States Increase

Question 49

Question 49

Multiple Choice

According to purchasing-power parity,if prices in the United States increase by a larger percentage than prices in the United Kingdom,then the


A) real exchange rate rises.
B) nominal exchange rate rises.
C) real exchange rate falls.
D) nominal exchange rate falls.

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