Which of the Following Is a Statement of the Purchasing

Multiple Choice

Which of the following is a statement of the purchasing power parity (PPP) theory of exchange rate determination? The exchange rate will adjust in the

A) long run until the interest rate is roughly the same in both countries.
B) long run until real GDP is roughly the same in both countries.
C) long run until the average price of goods is roughly the same in both countries.
D) short run until the average price of goods is roughly the same in both countries.