Which of the following is incorrect?
A. Exchange rates in the short run are much more variable than inflation differentials.
B. Deviations from PPP are much more apparent for monthly data than annual.
C. PPP holds best in the long run.
D. None of the above.
Answer:D
Which of the following is incorrect?
A. Exchange rates in the short run are much more variable than inflation differentials. B. Deviations from PPP are much more apparent for monthly data than annual. C. PPP holds best in the long run. D. None of the above.