"The change in exchange rates is determined by the difference in the inflation rates of the two countries." This statement expresses the concept of:

Question

Quizplus · Accepted Answer

The statement expresses the concept of relative purchasing power parity, which posits that the rate of change in the exchange rate between two currencies over time should approximately equal the difference in the inflation rates of the two countries.

"The Change in Exchange Rates Is Determined by the Difference