Because there are a variety of factors in addition to inflation that affect exchange rates, this will:
A. reduce the probability that PPP shall hold.
B. increase the probability that PPP shall hold.
C. increase the probability the IFE will hold.
D. increase the probability that PPP and IFE will hold.
Answer:A
Because there are a variety of factors in addition to inflation that affect exchange rates, this will:
A. reduce the probability that PPP shall hold. B. increase the probability that PPP shall hold. C. increase the probability the IFE will hold. D. increase the probability that PPP and IFE will hold.