Which of the Following Quotations Best Describes Purchasing Power Parity

question 68

Multiple Choice

Which of the following quotations best describes purchasing power parity?

• A)"Goods purchased in Canada are cheaper then in the United States."
• B)"The price of bananas is the same in Canada and the United States, adjusting for the exchange rate."
• C)"The recent low Canadian interest rate has decreased demand for the Canadian dollar."
• D)"The expected depreciation of the Canadian dollar is currently lowering demand for it."
• E)"The market feeling is that the Canadian dollar is overvalued and will likely depreciate."

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Definitions:

Principal

The most important or significant entity in a given situation, or the original sum of money in a loan or investment before interest.

Implied

Suggested or understood without being directly expressed.

Conduct

Refers to the manner in which a person behaves, especially in a particular context or situation.

Ratify

To formally approve or confirm an agreement, treaty, or amendment, making it officially valid.