The Concept of Purchasing Power Parity Refers to

question 31

Multiple Choice

The concept of purchasing power parity refers to

• A)the decrease in the market value of a currency relative to another currency.
• B)consumers' preferences for imports over exports or goods produced at home.
• C)the exchange rate between currencies that equalizes the purchasing power of each currency by eliminating the differences in price levels in each economy.
• D)the exchange rate between currencies that equalizes the purchasing power of each currency by increasing the differences in price levels in each economy.