The "Purchasing-Power-Parity" Theory States That the Most Important Determinant of Exchange

question 118

Multiple Choice

The "purchasing-power-parity" theory states that the most important determinant of exchange rates is their role in equating ________ between trading nations.

• A)nominal interest rates
• B)inflation rates
• C)prices of identical goods
• D)nominal GDP growth rates

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Definitions:

Acceptance of Goods

The act by which a buyer indicates their agreement that the goods received from the seller conform to the contract specifications.

Reasonable Opportunity

A legal concept giving individuals or parties sufficient time and access to information necessary to make informed decisions or respond to legal processes.

Repudiated the Contract

The act of refusing to perform the duties or obligations set forth in a contract.

Withdrawn

Refers to the act of taking back or removing an offer, statement, or accusation before it has been accepted or acted upon.