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If Prices Are Flexible and PPP Holds, It Is Possible

Question 161

Multiple Choice

If prices are flexible and PPP holds, it is possible to forecast the exchange rate in the long run whenever ______ change in a nation, ceteris paribus,.


A) real income and nominal growth rate of the money supply
B) levels of trade and financial flows
C) capital controls
D) short-run nominal interest rates

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