Purchasing-power parity describes the forces that determine:
A)exchange rates in the short run
B)exchange rates in the long run
C)prices in the long run
D)prices in the short run

Question

Quizplus · Accepted Answer

Purchasing-power parity (PPP) is a theory that suggests that in the long run, exchange rates should adjust so that identical goods cost the same in different countries, thus determining exchange rates in the long run.

Purchasing-Power Parity Describes the Forces That Determine