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Question
Which of the following weakens the link between relative price changes and changes in exchange rates predicted by purchasing power parity (PPP) theory by violating the assumption of efficient markets?A.Government intervention in cross-border trade
B.The relationship between money supply and price inflation
C.The impact of increase in currency on relative demand and supply conditions of currencies
D.Excessive growth in money supply
E.The insignificant impact of transportation costs on international trade
Answer
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