Which of the following events would be consistent with purchasing-power parity?
A) The price level in the United States rises more rapidly than that in Ireland and the real exchange rate defined as Irish goods per unit of U.S.goods stays the same.
B) The money supply in the United States rises more rapidly than in Egypt and the nominal exchange rate defined as Egyptian pounds per dollar falls.
C) Earl,a worldwide traveler,looks at exchange rates and worldwide breakfast prices one morning and finds that whatever country he decides to go to he can convert $5 into enough local currency to buy the same breakfast.
D) All of the above are correct.

Question

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The Answer of Which of the following events would be consistent with purchasing-power parity?
A) The price level in the United States rises more rapidly than that in Ireland and the real exchange rate defined as Irish goods per unit of U.S.goods stays the same.
B) The money supply in the United States rises more rapidly than in Egypt and the nominal exchange rate defined as Egyptian pounds per dollar falls.
C) Earl,a worldwide traveler,looks at exchange rates and worldwide breakfast prices one morning and finds that whatever country he decides to go to he can convert $5 into enough local currency to buy the same breakfast.
D) All of the above are correct.

Which of the Following Events Would Be Consistent with Purchasing-Power