Which of the Following Is Correct Regarding Purchasing Power Parity

question 120

Multiple Choice

Which of the following is correct regarding purchasing power parity?

• A) It gives us a better idea of what people can actually buy with the financial resources they have.
• B) It reflects the principle that exchange rates are set so that prices of similar products in different countries are unequal.
• C) It does not really give a good sense of the standards of living around the world.
• D) It reflects the principle that capitalism is a better system than communism.
• E) None of these statements are accurate.