The Theory of PPP Suggests That If One Country's Price

question 1

Multiple Choice

The theory of PPP suggests that if one country's price level rises relative to another's,its currency should

• A)depreciate.
• B)appreciate.
• C)float.
• D)do none of the above.

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Definitions:

Abilities

The skills, talents, or competencies a person has, which can be natural or developed, that enable them to perform specific tasks or actions.

Exertion

The physical or mental effort applied in order to achieve something.

Naïve Psychology

A concept in social psychology that refers to the natural human capacity to make sense of other people's behavior by attributing particular psychological states and traits to them.

Heider

Refers to Fritz Heider, an Austrian psychologist known for his work in the psychology of interpersonal relations and attribution theory.