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

question 91

Multiple Choice

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

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

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Definitions:

Liquidation

The process of converting assets into cash or other forms of payment to settle debts or obligations of a business.

Partnership

A formal business structure where multiple individuals are involved in managing the enterprise and also share the profits.

Assets

Resources a business owns.

Partnership

A legal and business relationship between two or more individuals who join together to conduct a business. Each partner contributes resources and shares the profits and losses.