Which of the Following Does Purchasing-Power Parity Imply

question 47

Multiple Choice

Which of the following does purchasing-power parity imply?

• A)the foreign price level times the nominal exchange rate (given as amount of foreign currency per dollar)equals the U.S.price level.
• B)The price of domestic goods relative to foreign goods cannot change.
• C)The nominal exchange rate is the ratio of foreign prices to U.S.prices.
• D)All of the above are correct.

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Definitions:

New Product

A good, service, or idea that is perceived by some potential customers as new and that is introduced to the market.

Consultative Decisions

Are made by one individual after seeking input from or consulting with members of a group.

Manager

An individual responsible for controlling or administering an organization or group of staff; someone who makes decisions and oversees the work of others.

Subordinates

Individuals who are lower in rank or position and are typically under the direction of someone else within an organizational hierarchy.