_____ is a theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, if expressed in the same currency.

Question

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Purchasing power parity theory explains that if the exchange rates of two countries are in balance, the cost of a product purchased in one will cost the same in the other, if expressed in the same currency. The theory asserts that over the long run, currency exchange rates should move towards the rate that would equalize the price of an identical basket of goods and services in any two countries.

_____ Is a Theory That States That If the Exchange