Suppose that the inflation rate in India is 100 percent and the inflation rate in the U.S. is 5 percent. According to relative PPP, what would happen to the value of dollar/rupee exchange rate? If non...

Suppose that the inflation rate in India is 100 percent and the inflation rate in the U.S. is 5 percent. According to relative PPP, what would happen to the value of dollar/rupee exchange rate?

If non tradable goods prices rise faster in country A than in country B, and tradable goods prices remain unchanged, determine whether currency A will appear to be overvalued or undervalued.