According to the Purchasing Power Parity Theory,in the Long Run

question 110

Multiple Choice

According to the purchasing power parity theory,in the long run:

• A)the exchange rate between any two currencies should be equal all over the world.
• B)the value of the U.S.dollar should equal the value of the pound which should equal the value of the yen.
• C)inflation rates should equalize around the world.
• D)interest rates should equalize around the world.
• E)the exchange rate between the currencies of two countries should reflect the differences in price levels in the two countries.

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Definitions:

Mean

The mean is the average of a set of numbers, calculated by dividing the sum of these numbers by the count of the numbers.

Observations

Data points or individual pieces of data collected through experimentation, measurement, or survey.

Expenditures

Money spent by an individual or organization for goods or services.

Mean Amount

The average value of a set of numbers, calculated by adding all the numbers together and then dividing by the count of those numbers.