📊 International Financial Management
Q. If purchasing power parity were to hold even in the short run, then:
  • (A) real exchange rates should tend to decrease over time.
  • (B) quoted nominal exchange rates should be stable over time.
  • (C) real exchange rates should tend to increase over time.
  • (D) real exchange rates should be stable over time.
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✅ Correct Answer: (D) real exchange rates should be stable over time.

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