Dollar is less than the purchasing power of the euro

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Reference no: EM131104898

If the purchasing power of a dollar is less than the purchasing power of the euro, purchasing power parity would predict that

in the short run, exchange rates will move to equalize the purchasing power of the dollar and the euro.

in the long run, exchange rates will move to equalize the purchasing power of the dollar and the euro.

in the long run, interest rates will move to equalize the purchasing power of the dollar and the euro.

in the short run, interest rates will move to equalize the purchasing power of the dollar and the euro.

Reference no: EM131104898

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