According to Purchasing Power Parity (PPP) Theory, the Price of a "Basket

question 60

Multiple Choice

According to purchasing power parity (PPP) theory, the price of a "basket of goods" should be

• A) the sum of the required "real" rate of interest.
• B) unchangeable based on the forward exchange rate.
• C) roughly equivalent in each country in relatively efficient markets.
• D) discounted to reflect trade barriers.
• E) focused strictly on consumer and not industrial goods.

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