from the afternoon session, question 12:
If the inflation raite in the US at the end of 2011 was 3.5%, using relative PPP, the approximate change in China’s (4.1% inflation) exchange rate is closest to:
according to answer key, the correct answer is A
the way i understand it, a higher relative inflation will cause depreciation, which means the chinese x-rate would decrease. my answer is C. am i wrong?
also, anyone know where i can find BSAS errata?