Multiple Choice
Which is the theory that suggests that the exchange rate will adjust so that the prices of goods in different countries are the same?
A) Price differentials
B) The law of zero price
C) The law of multiple prices
D) Purchasing power parity
E) Comparative advantage
Correct Answer:

Verified
Correct Answer:
Verified
Related Questions
Q6: A depreciation of the domestic currency occurs
Q7: Assume that one U.S. dollar equals 100
Q8: It is possible to have both a
Q9: Purchasing power parity exists when domestic currency<br>A)buys
Q10: If a country fixes its currency to
Q12: Assume that $1 equals 100 yen. A
Q13: The yen has depreciated if $1 equaled
Q14: The U.S. dollar has appreciated against the
Q15: If there is an increase in the
Q16: The Economic and Monetary Union in Europe