According to Purchasing-Power Parity,if Over the Course of a Year

question 54

Multiple Choice

According to purchasing-power parity,if over the course of a year the price level in the U.S.rises more than in Japan,then which of the following falls?

• A)the U.S.real exchange rate,but not the U.S.nominal exchange rate
• B)the U.S.nominal exchange rate,but not the U.S.real exchange rate
• C)the U.S.nominal exchange rate and the U.S.real exchange rate
• D)neither the real exchange rate nor the nominal exchange rate

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A strategy where a business aims to become the least costly producer in its industry while maintaining sufficient levels of quality.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.

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A financial metric that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales revenue by total assets.