Purchasing power parity is the theory that,in the long run,exchange rates move to equalize

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is a theory that suggests that in the long run, exchange rates between countries should adjust to equalize the prices of a similar basket of goods and services, also known as the relative purchasing power of currencies across countries. Therefore, the correct choice is D, as it directly relates to the concept of PPP. Choices A, B, and C, are not directly related to PPP.

Purchasing Power Parity Is the Theory That,in the Long Run,exchange