The Purchasing Power Parity (PPP)theory of the Exchange Rate Breaks

question 85

Multiple Choice

The purchasing power parity (PPP) theory of the exchange rate breaks down if

• A)one country invents new products that other countries want to import.
• B)one country discovers new deposits of raw materials that it can sell to other countries.
• C)governments make large foreign transfers or subsidize exports and tax imports.
• D)all of the above.

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Definitions:

IUPAC

The International Union of Pure and Applied Chemistry, an organization that sets standards for naming chemical compounds and elements, among other activities in the chemistry field.

Hydrogen Bonded

Describes a type of chemical bond that occurs when a hydrogen atom, which is covalently bonded to a highly electronegative atom, forms an electrostatic or partial covalent bond with another electronegative atom.

Tertiary Amides

Amides derived from carboxylic acids where the nitrogen atom is bonded to three other carbon atoms, not including the carbonyl carbon.

Secondary Amides

Organic compounds characterized by a carbonyl group (C=O) attached to a nitrogen atom, which in turn is bonded to two alkyl or aryl groups.