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"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

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PPP

PPP

Q our book describes the increase in the U.S. money supply as being analogous to giving people more money. If the output of goods and services is not growing at a similar rate, inflation will eventually occur. According to PPP Theory, what will happen to the U.S. dollar? Why? Explain your answer in a well-constructed and persuasive manner.

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From the provided book and the research, it has been understood that the inflation can affect negatively the US Dollar. There is a perfect connection between the increase of the US dollar and the economy of the United States. It is a matter of important fact that if the output of the services and goods are not growing at a similar rate then definitely inflation will occur eventually. According to PPP Theory, the U.S. dollar can be increased with the constant demand for good in the market of the United States.