Purchasing power parity can best be defined as:
A) An agreement to trade currencies based on the exchange rate today for settlement in two days.
B) The exchange rate used on trading currencies.
C) An agreement to exchange currency at some time in the future.
D) The agreed upon exchange rate to be used in a forward trade.
E) The idea that the exchange rate adjusts to keep purchasing power constant among currencies.
Correct Answer:
Verified
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