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:

Concrete Operational

A stage in Piaget's theory of cognitive development where children aged about 7 to 11 years can perform various mental operations using concrete objects.

Sensorimotor

Pertaining to the body's responses to sensory stimuli and the coordination of sensory and motor activities.

Conservation

The principle that certain physical characteristics (such as volume, mass, or number) remain unchanged, even when their appearance changes, as understood in cognitive development.

Object Permanence

Object permanence is the understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, a key cognitive development in infancy.