Does hyperinflation cause a rapid rise in price of FC

Reference no: EM131835409

Question: a. According to purchasing power parity theory, a country with massive inflation should also experience a massive fall in the price of its currency in terms of other currencies (a depreciation). Is this what happened in Zimbabwe, or did the opposite occur?

b. Hyperinflation is defined as a rapid rise in the price of goods and services. According to purchasing power parity theory, does hyperinflation also cause a rapid rise in the price of foreign currencies(FC)?

Reference no: EM131835409

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