Which of the following is the best definition of purchasing power parity (PPP) .
A) The exchange rate on a spot trade.
B) The idea that the exchange rate adjusts to keep purchasing power constant among currencies.
C) Risk related to changes in value that arise because of political actions.
D) Large borrowers issue notes up to one year in maturity in the Euromarket. Banks underwrite or sell notes.
E) The rate most international banks charge one another for overnight Eurodollar loans.
Correct Answer:
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