Which of the Following Is Referred to as the Purchasing

question 103

Multiple Choice

Which of the following is referred to as the purchasing power parity puzzle?

• A) Reduced levels of inflation in countries where the growth in the money supply is faster than the growth in its output.
• B) The reason why countries with high inflation rates see depreciation in their currency exchange rates.
• C) Identical products being sold in different countries for the same price when their price is expressed in terms of the same currency.
• D) The failure to find a strong link between relative inflation rates and exchange rate movements.