An overall rise in prices in the economy is called:

Evidence on the existence of relative PPP shows that:

A) the evidence for relative PPP is scanty and theory is large discredited B) the evidence for relative PPP is hit or miss, and so one should exercise cations in using relative PP to predict changes in exchange rates C) relative PPP is an approximate guide to predicting the relationship between changes in inflation and exchange rates over long periods such as decades d) relative ppp holds nearly perfectly in the short and long run, are used with great accuracy to make predictions

On the graph above, suppose the economy is at point F when there is a temporary positive supply shock. The new long-run equilibrium is at point ________

A) H B) I C) F D) G E) none of the above