question archive Suppose that prices in Brazil are rising faster than US prices, and the US is a very important trading partner of Brazil
Suppose that prices in Brazil are rising faster than US prices, and the US is a very important trading partner of Brazil
Subject:FinancePrice: Bought3
- Suppose that prices in Brazil are rising faster than US prices, and the US is a very important trading partner of Brazil. (Brazil’s currency is called the real.) Suppose the dollar/real rate is floating.
Required :
What does relative purchasing power parity (RPPP) say should happen to the value of the real relative to the US dollar? Explain.
