According to relative purchasing power parity, if the inflation rate i
According to relative purchasing power parity, if the inflation rate in Italy was 8% and the inflation rate in Israel was 6%,
A) the Italian lira should fall 6%.
B) the Italian lira should fall 8%.
C) the Italian lira should fall 2%.
D) the Italian lira should rise 2%.
E) the Italian lira should rise 8%.
ANSWER
C
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