The Purchasing Power Parity Theory of Exchange Rate Determination Maintains

question 206

Multiple Choice

The purchasing power parity theory of exchange rate determination maintains that

• A)the exchange rate between two nations' currencies is determined by the percent of gold that backs each nation's currency.
• B)the exchange rate between two nations' currencies adjusts to reflect differences in the price levels in the two nations.
• C)in the short run, exchange rates are determined by central bank intervention in the currency markets.
• D)the exchange rate between two currencies is determined by the debt that each nation owes to the World Bank.

---

Definitions:

Cementum

A specialized, calcified substance covering the root of a tooth, playing a vital role in tooth stability by anchoring the tooth to the jawbone through the periodontal ligament.

Dentin

The hard, dense, bony tissue forming the bulk of a tooth beneath the enamel.

Crown

In dentistry, a type of dental restoration which completely caps or encircles a tooth or dental implant, used to improve their appearance or strength.

Pilonidal

Pertaining to a type of cyst that occurs in the crease of the buttocks and can become infected and filled with pus.