Purchasing Power Parity Exists When Domestic Currency

question 9

Multiple Choice

Purchasing power parity exists when domestic currency

• A)buys more goods abroad as at home.
• B)buys the same amount of goods abroad as at home.
• C)buys less goods abroad as at home.
• D)is not convertible to a foreign currency.
• E)has a fixed exchange rate with a foreign currency.

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Definitions:

Drawer

In the context of checks and negotiable instruments, the entity that writes and signs a check, instructing the bank to pay the stated amount to the party named on the document.

Payee

The party in a financial transaction who receives the payment.

Drawee

The party in a transaction who is directed to pay a specified amount of money, often referenced in the context of a check or draft.

Consumer Note

A debt instrument in which the buyer agrees to pay the seller a specified amount of money at a later date, often with interest.