The Relative Purchasing Power Parity Theory Postulates That

Multiple Choice

The relative purchasing power parity theory postulates that:

A) The equilibrium exchange rate is equal to the ratio of the price level in the two nations
B) the change in the exchange rate over a period of time should be proportional to the relative change in the price level in the two nations over the same time period
C) the change in the exchange rate over a period of time should be proportional to the absolute change in the price level in the two nations over the same time period
D) the exchange rate at a period of time should be proportional to the relative prices in the two nations