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Does the exchange rate of your data appear to support the theory of Purchasing Power Parity?Requirements:

  • 1 page descriptive analysis;
  • Graph of Nominal Exchange Rate and Relative Prices over time ,which has already given
  • First describe what is Purchasing Power Parity(the theory of Purchasing Power Parity)
  • Describe the trend or change in this graph(how exchange rate and relative price level change and how they are related)
  • Judge if the data conforms to the theory

 

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