Table 12-1

-Refer to the Table 12-1.What countries in the table does purchasing-power parity hold for?
A)Bolivia and Japan
B)Bolivia and Morocco
C)Japan and Thailand
D)Thailand and Morocco

Question

Table 12-1
 
-Refer to the Table 12-1.What countries in the table does purchasing-power parity hold for?
A)Bolivia and Japan 
B)Bolivia and Morocco 
C)Japan and Thailand 
D)Thailand and Morocco

Quizplus · Accepted Answer

Purchasing-power parity (PPP) holds when the exchange rate between two currencies equals the ratio of the countries' price levels. Looking at the table, only Bolivia and Morocco have the same price level ratio as their exchange rate ratio. Therefore, PPP holds for Bolivia and Morocco. It does not hold for Japan and Thailand.

Table 12-1 -Refer to the Table 12-1.What Countries in the Table Does