What would happen to the current exchange rate today

Reference no: EM133465587

Problem: Discuss the two versions of purchasing power parity (PPP). They are absolute PPP and relative PPP. If a domestic government entity released economic information that suggested that the purchasing power of money in the future will be less than previously expected, what would happen to the current exchange rate today? Will both absolute PPP and relative PPP hold, or will only one of them hold?

Reference no: EM133465587

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