A less restrictive form of purchasing power parity is ____.

Question

Quizplus · Accepted Answer

Relative purchasing power parity takes into account the relative changes in inflation rates between two countries and their effect on exchange rates, rather than assuming that inflation rates will be equal. This makes it a less restrictive form of purchasing power parity than absolute purchasing power parity, which assumes that prices for identical goods and services are the same across countries. Options A and D are not valid forms of purchasing power parity.

A Less Restrictive Form of Purchasing Power Parity Is ____