Relative Purchasing Power Parity

question 5

Multiple Choice

Relative purchasing power parity:

• A)states that identical items should cost the same regardless of the currency used to make the purchase.
• B)relates differences in inflation rates to changes in exchange rates.
• C)compares the real rate of return to the nominal rate of return.
• D)looks at the factors that determine the changes in interest rates.
• E)analyzes the changes in inflation rates to determine the cause.

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