One important reason to study the purchasing power parity theory is because
A) investors should borrow in a foreign currency, when there is a forward discount.
B) when inflation rates differ across international borders, PPP provides a baseline forecast of future exchange rates.
C) forecasting exchange rates is difficult and PPP makes it easier.
D) it provides currency dealers with a way to identify arbitrage opportunities.
Correct Answer:
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Q1: The version of purchasing power parity that
Q2: When the price level of an economy
Q3: In its absolute version,purchasing power parity states
Q4: What is the name of the expression
Q6: What is the name given to the
Q7: When is a currency said to be
Q8: Understanding the theory of purchasing power parity
Q9: All of the following options are some
Q10: Within the United States,what is the name
Q11: All of the following options are reasons
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