In Converting Currencies to a Common Denominator Such as the Dollar

Multiple Choice

In converting currencies to a common denominator such as the dollar, the procedure that uses the cost of a given basket of goods and services as the basis for setting the conversion rate for one currency into another is known as:

A) exchange rate parity.
B) consumer price index parity.
C) purchasing power parity.
D) GDP deflator parity.
E) central bank parity.