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Create the scatterplot showing change in relative prices on

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Purchasing power parity requires that the nominal exchange rate equal the ratio of the price level in your country to the price level in the US. For each year, calculate the percentage change in the exchange rate and in the ratio of the CPI in your country to that in the US. Make a scatterplot showing the change in relative prices on the x-axis and the percentage change in the exchange rate on the y-axis. Does PPP seem to hold? If not, what are some reasons why it may not?

Reference no: EM13396411

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