The PPP Theory Says That in the Long Run the Exchange

question 129

Multiple Choice

The PPP theory says that in the long run the exchange rate between two currencies should move toward __________ the cost in each country of an identical basket of internationally traded goods.

• A)equalizing
• B)minimizing
• C)maximizing
• D)reducing to zero
• E)disequilibrating

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Definitions:

James Tallmadge

An American politician who proposed an amendment to the Missouri statehood bill, which ignited a nationwide debate over the extension of slavery in the United States.

Senate

The upper chamber in various legislative bodies, particularly in bicameral systems, responsible for making and passing laws.

Slave Trade

The historical trade in which people were captured and sold as slaves, predominantly affecting Africans transported to the Americas.

Internal Slave Trade

refers to the buying and selling of slaves within the domestic borders of a country, particularly prevalent in the United States before the Civil War.