For Purchasing-Power Parity to Exist

Multiple Choice

For purchasing-power parity to exist,

A) flows of currency in the trade account must be offset by flows of currency in the capital account.
B) the nominal interest rate must be equal to the real interest rate in all countries.
C) converting a sum of funds from one currency to another does not alter its purchasing power.
D) a country's trade account must always be in balance.