Using Purchasing Power Parity Instead of Exchange Rates to Calculate

question 132

Multiple Choice

Using purchasing power parity instead of exchange rates to calculate output will most likely:

• A)increase the relative value of output in developing countries.
• B)lower the relative value of output in developing countries.
• C)leave the relative value of output in developing countries unchanged.
• D)show that prices in developing countries are higher than prices in developed countries.

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