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Unformatted text preview: linearization which the `inflation difference' implicitly assumes). Answers which are approximate --- as in my above verbal explanation --- should be penalized lightly -- 2 marks only. The question, and the associated problem set from which it derives, asks for exact calculations, but approximate ones that show an understanding of the essence of the PPP idea are almost fine. <== this is the ratio of base year prices, P_b/P^*_b...
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This note was uploaded on 01/20/2012 for the course INVESTMENT 101 taught by Professor Unknown during the Spring '08 term at Carnegie Mellon.
- Spring '08