If the purchasing power of a dollar is greater than the purchasing power of the yen, purchasing power parity would predict that
A) in the short run, exchange rates will move to equalize the purchasing power of the dollar and the yen.
B) in the long run, exchange rates will move to equalize the purchasing power of the dollar and the yen.
C) in the long run, interest rates will move to equalize the purchasing power of the dollar and the yen.
D) in the short run, interest rates will move to equalize the purchasing power of the dollar and the yen.
E) in the short run, Canada will grow more quickly than Japan.
Correct Answer:
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