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According to Purchasing-Power Parity,if Over the Course of a Year

Question 28

Multiple Choice

According to purchasing-power parity,if over the course of a year the price level in the U.S.rises more than in Canada,then which of the following rises?


A) the U.S.real exchange rate,but not the U.S.nominal exchange rate
B) the U.S.nominal exchange rate,but not the U.S.real exchange rate
C) the U.S.nominal exchange rate and the U.S.real exchange rate
D) neither the real exchange rate nor the nominal exchange rate

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