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When Purchasing Power Parity Exists

Question 61

Multiple Choice

When purchasing power parity exists:


A) it takes the same amount of one country's currency to buy a given group of goods across different countries when the currency is exchanged into local currencies.
B) a given group of goods will have the same local currency price in every country in which the goods are sold.
C) the price of one good is the same in every country.
D) the currency exchange rate is one unit of currency per one unit of currency regardless of local prices across countries.

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