Place the exchange rates, inflation rates and relevant interest rates for the U.S. dollar and the euro from 2007 to 2012 and also for the Chinese Yuan and the U.S. dollar from 2007 to 2012, by using the EIU database situated in the University Library. Give Relevant Tables in your paper.
Write down a 1,050 to 1,350 word paper by using this information and research of relevant materials in the University Library and other peer reviewed resources on Internet:
a) Define the term Purchasing Power Parity.
b) Describe why it is significant to international business.
c) Analyze whether the Purchasing Power Parity holds for such exchange rates.
d) Define and describe the persuade of International Fisher Effect.
e) What other factors might influence the relative exchange rates. Be specific and offer numerical illustrations.