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According to Purchasing Power Parity Theory, in the Long Run

question 30

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According to purchasing power parity theory, in the long run what would happen to the exchange rate if the price of a computer in the United States = $1,000, the price of a computer in Japan = 200,000 yen, and the current exchange rate was $1.00 = 100 Yen?

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Definitions:

ATP

Adenosine triphosphate, a high-energy molecule used as the main energy currency in the cell for metabolic processes.

ADP

Adenosine diphosphate, a molecule involved in energy transfer within cells.

Fermentation

A metabolic process that converts sugar to acids, gases, or alcohol in the absence of oxygen.

Gravity

A natural phenomenon by which all things with mass or energy are brought toward one another, including objects ranging from subatomic particles to planets and stars.

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