What is differences between absolute ppp and relative ppp

Reference no: EM13192436

A) Explain Purchasing Power (PPP). What is the differences between Absolute PPP and Relative PPP? Why does PPP not hold in reality?

B)Explain what it meant by liquidity trap.Use the interest parity condition to show how the exchange rate is determined in such a situation. What can monetary policy so in such a situation?

Reference no: EM13192436

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