According to Purchasing Power Parity,which of the Following Is FALSE

question 27

Multiple Choice

According to purchasing power parity,which of the following is FALSE about an overvalued dollar compared to the Japanese yen?

• A)U)S.merchants would be motivated to import more Japanese goods.
• B)Japanese merchants would tend to export more to the United States.
• C)Prices in the United States would tend to fall.
• D)Over the long term,the exchange rate would fall.
• E)Prices in Japan would tend to rise.

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Definitions:

Stock Price

The current price at which a particular stock can be bought or sold in the market, influenced by supply and demand, company performance, and market sentiment.

Forecast Earnings

An estimate of a company's future earnings per share over a specific period, often used by analysts to project future financial performance.

ROE

Return on Equity, a measure of the profitability of a business in relation to the equity, calculated as net income divided by shareholder's equity.

Plowback

The reinvestment of earnings by a company back into its business, often for expansion or development; also known as retained earnings.