If Absolute Purchasing Power Parity Holds, Under Fixed Exchange Rates

question 9

Multiple Choice

If absolute purchasing power parity holds, under fixed exchange rates:

• A)the home interest rate equals the foreign interest rate.
• B)the home inflation rate equals the foreign inflation rate.
• C)the growth rate of the nominal exchange rate is zero.
• D)all of the above.

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Definitions:

Persistence

Constancy of purpose and unrelenting determination; a leadership quality required to persevere and prevail, even when others lose their strength and will.

Peak-Performance

is a state where an individual or team operates at their maximum potential, achieving the highest level of productivity and effectiveness.

Exhilaration

A feeling of excitement, happiness, or elation often experienced during moments of high achievement or adventure.

Unconsciously Incompetent

Not being aware of one's lack of skill or knowledge in a particular area.