According to the ________ principle,exchange rates are set so that the prices of similar products in different countries are about the same.
A)nominal GDP
B)gross national product
C)consumer price index
D)equal prices
E)purchasing power parity

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is the principle that exchange rates should adjust so that identical goods cost the same in different countries, reflecting the relative purchasing power of each currency.

According to the ________ Principle,exchange Rates Are Set So That