1. Study Guide Week Twelve (
Welcome to EC 382: International Economics By: Dr. Jacqueline Khorassani
Study Guide
Week Twelve (

2. General Questions on Chapter 15
What are the determinants of the exchange rate over long periods of time?
What effect does monetary policy have on the country’s price level and therefore its exchange rate?
What type of benchmark exchange rate should be used to compare the current exchange rate against?

3. Specific Questions on Chapter 15
What is the Purchasing Power Parity?
What is the Absolute Purchasing Power Parity?
What is the Relative Purchasing Power Parity?
Why PPP fails many empirical tests?
Nominal/real exchange rates
How are they different?
Nominal/real interest rates
What is real interest parity?