If Purchasing Power Parity Holds,what Will Happen to the Currency

question 86

Multiple Choice

If purchasing power parity holds,what will happen to the currency of a country with high inflation?

• A) The currency will appreciate.
• B) The currency will depreciate.
• C) There will be no significant change in the currency's value.
• D) The currency will sell at a forward premium.

---

Definitions:

Buying Decision

The process by which a consumer identifies a need or desire, gathers information, evaluates choices, and finally selects a product or service.

Decision-making Process

A structured approach to making choices by gathering information, identifying alternatives, weighing options, and choosing a course of action.

Dissonance

A state of mental conflict or unease resulting from holding contradictory beliefs or attitudes.

Realistic Claims

Assertions about a product or service that are truthful, verifiable, and grounded in factual evidence, avoiding exaggeration.