The 'Theory of Purchasing Power Parity' Implies That

question 78

Multiple Choice

The 'theory of purchasing power parity' implies that:

• A)in the long run, the prices of goods in different countries will be the same when measured in a common currency.
• B)the prices of goods in different countries are always the same.
• C)the nominal exchange rates will equate over time.
• D)demand and supply have no influence over the exchange rate.

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