If the Purchasing Power of the Dollar Is Less Than

question 127

Multiple Choice

If the purchasing power of the dollar is less than the purchasing power of the British pound,purchasing power parity predicts that the exchange rate will

• A)increase if the exchange rate is greater than 1 pound per dollar.
• B)decrease if the exchange rate is less than 1 pound per dollar.
• C)be equal to the relative purchasing power across the currencies in the long run.
• D)All of the above are correct.

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Definitions:

Implied Warranty of Fitness

An assurance that a product will meet a buyer’s specified purpose when the seller knows the particular purpose for which the buyer will use the goods.

Survival Hike

An outdoor adventure aimed at testing or improving the skills necessary to survive in wilderness conditions.

Personal Injury

Physical or psychological harm to a person resulting from the negligence, recklessness, or intentional misconduct of another party.

Express Warranty

A clearly stated guarantee by a seller about the condition, quality, or performance of a product or service.