The notion that exchange rates adjust to keep the purchasing power of a currency constant across countries is called:

Question

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Purchasing power parity (PPP) is the economic theory that suggests that the exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. This means that the exchange rate adjusts so that an identical good in two different countries has the same price when expressed in the same currency.

The Notion That Exchange Rates Adjust to Keep the Purchasing