The Theory of Purchasing Power Parity Says

question 3

Multiple Choice

The theory of purchasing power parity says:

• A) the real exchange rate is always greater than one.
• B) a dollar should buy the same goods no matter where in the world you go.
• C) the dollar price of a basket of goods in the U.S. should equal the yen price of a basket of goods in Japan.
• D) the real exchange rate is always less than one.

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Definitions:

Council of Trent

A series of Catholic Church councils held between 1545 and 1563 in response to the Protestant Reformation, leading to significant church reforms.

Malleus Maleficarum

The Malleus Maleficarum, often referred to as the Hammer of Witches, is a treatise on witchcraft written in 1486, which played a significant role in the witch hunts in Europe.

Avignon Papacy

The period from 1309 to 1377 during which seven successive popes resided in Avignon, France, rather than in Rome, leading to a significant schism in the Catholic Church.

Great Schism

Refers to two major divisions in Christian history; the first in 1054 between the Eastern (Orthodox) and Western (Catholic) Churches, and the second, beginning in 1378, a division within the Roman Catholic Church where rival popes were established.