Chapter 7 Notes - Chapter 7 International Parity Conditions Questions 7-1 Purchasing Power Parity Define the following terms a The law of one price The

Chapter 7 Notes - Chapter 7 International Parity Conditions...

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Chapter 7 International Parity Conditions Questions 7-1.Purchasing Power Parity.Define the following terms:a.The law of one price. b.Absolute purchasing power parity. c.Relative purchasing power parity. 7-2.Nominal Effective Exchange Rate Index. Explain how a nominal effective exchange rate index is constructed.

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