When PPP Does Not Hold in the Short Run, Economists

Multiple Choice

When PPP does not hold in the short run, economists have developed an alternative short-run explanatory theory based on the idea that:

A) currency values are different from other prices, since currencies are not considered assets.
B) currency values are influenced in the short run because they serve as short-term assets.
C) currency values will eventually result in PPP over time, so no short-run theory is needed.
D) currency values are set by government entities and the IMF so the value often does not result in PPP.