Suppose a given basket of goods and services costs 9 dollars in the Australia and 5,400 baht in Thailand.If the exchange rate is 600 baht per Australian dollar, purchasing power parity implies that the:
A) exchange rate has attained its long run equilibrium value.
B) Australian dollar must appreciate to restore purchasing power parity.
C) Australian dollar must depreciate to restore purchasing power parity.
D) baht must depreciate to restore purchasing power parity.
Correct Answer:
Verified
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