The Purchasing Power Parity Theory Is Not a Good Explanation

question 75

Multiple Choice

The purchasing power parity theory is not a good explanation of nominal exchange rate determination in the short-run because:

• A) there is no evidence that low inflation is associated with less rapid nominal exchange rate depreciation.
• B) most nominal exchange rates are fixed and foreign exchange markets do not bring the supply and demand for currencies into equilibrium.
• C) most goods and services are traded internationally and are standardized.
• D) many goods and services are not traded internationally and not all internationally-traded goods are standardized.

---

Definitions:

Family Strength

A concept referring to the positive attributes and resources within a family that enhance well-being and resilience among its members.

Religiosity

The degree of one's religious belief, practice, and involvement within a religious tradition.

School Adjustment

The process by which students adapt to their school environment, encompassing academic, social, and psychological aspects, influencing their overall educational experience and success.

Chromosomes

Thread-like structures located inside the nucleus of animal and plant cells, made of protein and a single molecule of DNA, carrying genetic information in the form of genes.