If P = Domestic Prices, P* = Foreign Prices, and E

question 114

Multiple Choice

If P = domestic prices, P* = foreign prices, and e is the nominal exchange rate, which of the following is implied by purchasing-power parity?

• A)P = e/P*
• B)1 = e/P*
• C)e = P*/P
• D)P/P*=1

---

Definitions:

Appendix

A supplementary section at the end of a book or document providing additional details.

Data Analysis

The process of systematically examining and evaluating data to extract meaningful insights or conclusions.

Introduction

The initial section of a document or speech that sets the context, presents the main idea, and outlines what is to follow.

Manipulative

Employing deceptive or indirect tactics to influence or control others for personal advantage.