The concept that exchange rates vary to keep purchasing power constant among currencies is referred to as:

Question

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The concept described refers to purchasing power parity (PPP), which suggests that exchange rates should adjust over time so that goods with identical prices trade for the same price in different currencies. This is based on the idea that in the long-run, exchange rates should adjust to ensure that the same basket of goods costs the same in different countries when adjusted for the currency exchange rate.

The Concept That Exchange Rates Vary to Keep Purchasing Power