Absolute purchasing-power parity theory

Reference no: EM131015464

What would happen to the dollar/euro exchange rate it growth, inflation, labor productivity, and interest rates increase in the United States but not in the European Monetary Union (EMU)?

What is the absolute purchasing-power parity theory?

Why is this not acceptable? What is the relative purchasing-power parity theory?

When do we expect it to hold? Do empirical tests confirm or reject the relative purchasing-power parity theory?

Reference no: EM131015464

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