Which of the Following Is the Theory Relating the Expected

question 50

Multiple Choice

Which of the following is the theory relating the expected adjustment needed in the future spot exchange rate between countries to the inflation rate in each country?

• A) Purchasing power parity
• B) Interest rate parity
• C) Law of one price
• D) Currency swap parity

---

Definitions:

Competitive Advantage

A particular circumstance or characteristic that grants a company a dominant or advantageous position over its competition.

Future Growth

Refers to the expansion and development of a business or economy over time.

Operational Control

The process of monitoring and managing day-to-day operations of a business to ensure that organizational goals are met.

Displaced Workers

Individuals who have lost their jobs due to economic changes, technological advancements, or other external factors beyond their control.