If Purchasing-Power Parity Holds but Then U

question 14

Multiple Choice

If purchasing-power parity holds but then U.S.prices rise,which of the following move the exchange rate back towards purchasing-power parity?

• A)foreign prices rise or the U.S.nominal exchange rate rises
• B)foreign prices rise or the U.S.nominal exchange rate falls
• C)foreign prices fall or the U.S.nominal exchange rate rises
• D)foreign prices fall or the U.S.nominal exchange rate falls

---

Definitions:

Attributional Biases

Cognitive biases that affect the way we determine the causes of our own and others' behaviors, often leading to errors in judgment.

Oppression

The exercise of authority or power in a burdensome, cruel, or unjust manner, often to maintain dominance over a group or individual.

Public Discourse

The exchange of ideas, information, and viewpoints in the public sphere, often involving discussion on societal issues.

Leisure Time

Free time spent away from job responsibilities, chores, and duties, often pursued for relaxation, entertainment, or other personal enjoyment.