The Purchasing Power Parity (PPP)theory Says That in the Long

question 80

Multiple Choice

The purchasing power parity (PPP) theory says that in the long run,the exchange rate between two currencies should move toward _____ the _____ in each country of an identical basket of internationally traded goods.

• A)equalizing;cost
• B)minimizing;price
• C)maximizing;cost
• D)maximizing;price
• E)minimizing;cost

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Definitions:

Economic Questions

Fundamental inquiries regarding how societies allocate resources, including what to produce, how to produce, and for whom to produce.

Curbing Pollution

Measures undertaken to reduce or eliminate the release of pollutants into the environment to protect ecological balance and public health.

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External Cost

Costs that result from economic activities and are not reflected in market prices, often borne by a third party or society at large.