Which of the Following Best Describes Purchasing Power Parity

question 172

Multiple Choice

Which of the following best describes purchasing power parity?

• A) Total quantity of goods and services produced by an economic system
• B) Total quantity of goods and services that can be purchased with one paycheque
• C) Total quantity of goods and services that could have been purchased if one's pay rose in the same proportion as inflation
• D) The principle that exchange rates are set so that prices of similar products in different countries are about the same
• E) The principle that a market economy determines supply and demand for consumer products

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