According to the Purchasing-Power-Parity Theory,the U

question 60

Multiple Choice

According to the purchasing-power-parity theory,the U.S.dollar maintains its purchasing-power parity if it depreciates by an amount equal to the excess of:

• A) U.S.interest rates over foreign interest rates
• B) Foreign interest rates over U.S.interest rates
• C) U.S.inflation over foreign inflation
• D) Foreign inflation over U.S.inflation

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