Multiple Choice
Suppose that the price of a Blu-ray disc player is $240 in the United States and 11,000 rupees in India. If the current exchange rate is 40 rupees to the dollar, then purchasing power parity theory would predict that in the long run
A) India will begin to export Blu-ray disc players to the United States.
B) the exchange value of the rupee will depreciate.
C) the exchange value of the rupee will appreciate.
D) the exchange value of the dollar will depreciate.
Correct Answer:
Verified
Correct Answer:
Verified
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