Unit vi discussion | FIN 6302 | Columbia Southern University

Your textbook and the unit lesson discuss the two versions of purchasing power parity (PPP). They are absolute PPP and relative PPP. If a domestic government entity released economic information that suggested that the purchasing power of money in the future will be less than previously expected, what would happen to the current exchange rate today? Will both absolute PPP and relative PPP hold, or will only one of them hold? Support your answer, and analyze the responses of your peers.

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