Prices in Both the U

Multiple Choice

Prices in both the U.S. and India rise, but prices in India increase by a larger percentage. According to purchasing-power parity the U.S. dollar

A) gains value both in terms of the domestic goods and services it can buy and in terms of the Indian currency it can buy.
B) gains value in terms of the domestic goods and services it can buy, but loses value in terms of the Indian currency it can buy.
C) loses value in terms of the domestic goods and services it can buy, but gains value in terms of the Indian currency it can buy.
D) loses value both in terms of the domestic goods and services it can buy and in terms of the Indian currency it can buy.