According to the Purchasing Power Parity Theory, in the Long

question 202

Multiple Choice

According to the purchasing power parity theory, in the long run

• A)the exchange rate between any two currencies should be equal all over the world
• B)the value of the dollar should equal the value of the pound which should equal the value of the yen
• C)inflation rates should equalize around the world
• D)interest rates should equalize around the world
• E)the exchange rate between the Canadian dollar and the British pound should reflect differences in price levels between Canada and Britain

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