NO.PZ2020012102000011
问题如下：
Fap is a small country whose currency is the Fip. Three years ago, the exchange rate was considered to be reflecting purchasing power parity (PPP). Since then, the country’s inflation has exceeded inflation in the other countries by about 5% per annum. The Fip exchange rate, however, remained broadly unchanged.
What would you have expected the Fip exchange rate to show if PPP prevailed? Are Fips over or undervalued, according to PPP?
选项：
解释：
According to PPP, to offset the effect of the higher inflation in Fap, the Fip should have depreciated against the other currencies by approximately the difference between Fap inflation and that in the other countries. According to PPP, Fip is overvalued.
解析：根据购买力平价理论，为了抵消Fap中较高的通货膨胀的影响，Fip应该对其他货币贬值大约是Fap通货膨胀与其他国家之间的差额。根据购买力平价理论，Fip被高估了。
The excess inflation have negative impact on competivenss of Fap.
To maintain competiveness, Fip should depreciate, thus offset the appreciate impact implied by PPP, so exchange rate of Fip remained unchange even PPP prevailed.
According to PPP only, Fip should depreciate for the excess inflation, but indeed did not, so Fip is overvalued.
