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Purchasing Power Parity States That

Question 159

Multiple Choice

Purchasing power parity states that


A) exchange rates adjust to equalize prices across countries.
B) prices adjust to equalize rates of return across countries.
C) rates of return adjust to equalize expected exchange rate fluctuations.
D) exchange rates adjust to equalize the real purchasing power of money across countries.
E) purchasing power adjusts to reflect expected exchange rate fluctuations.

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