Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?

A. e of the above

B. depreciate by 8 percent against the yen

C. remain at its existing exchange rate

D. appreciate by 8 percent against the yen

Be the first to comment if anything wrong with this mcq
Your comment successfully submitted!
It will automatically posted after review and approval by our staff member.