According to the Doctrine of Purchasing-Power Parity,which of the Following

question 23

Multiple Choice

According to the doctrine of purchasing-power parity,which of the following should depreciate if over the next year the inflation rate is higher in the U.S.than in the Euro area?

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

---

Definitions:

Informational Report

A document that provides data, facts, and feedback without analysis or recommendations, intended to inform the reader.

Process

Process refers to a series of actions or steps taken to achieve a particular end.

Analytical Reports

Documents that present detailed analysis and interpretations of data or issues, often used to inform decision-making or problem-solving processes.

Proposals

Documents or presentations offering a plan or suggestion, often seeking approval or support for action.