Which of the following is a FALSE statement concerning purchasing power parity?
A)Purchasing power parity states that dollars will tend to exchange for pounds at a rate that maintains a constant purchasing power of a given quantity of a currency.
B)It is rare to see deviations from the purchasing power parity value of currencies.
C)Over the long run, purchasing power parity exerts influence over exchange rates.
D)An overvalued dollar buys more in Britain than it does in the United States.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) often sees deviations from its theoretical value due to factors like transportation costs, trade barriers, and market imperfections. It is not rare to see deviations from PPP values of currencies.

Which of the Following Is a FALSE Statement Concerning Purchasing