Other things the same, according to purchasing-power parity, if over the next few years Mexico has a higher money supply growth rate than the U.S., then
a. prices in Mexico will rise by a larger percentage than in the U.S. So, the dollar will appreciate against the Mexican peso.
b. prices in Mexico will rise by larger percentage than in the U.S. So, the dollar will depreciate against the Mexican peso.
c. prices in Mexico will rise by a smaller percentage than in the U.S. So, the dollar will appreciate against the Mexican peso.
d. prices in Mexico will rise by a smaller percentage than in the U.S. So, the dollar will depreciate against the Mexican peso.
a
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The primary reason we think of inflation as bad even when wages rise with it is that it:
What will be an ideal response?
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A. 10 B. 20 C. 30 D. 40 E. 50