Author Question: Purchasing power parity exists when domestic currency: a. maintains a fixed exchange rate with ... (Read 40 times)

BrownTown3 · **on:** Jun 30, 2018

Purchasing power parity exists when domestic currency:
a. maintains a fixed exchange rate with foreign currency.
b. is not convertible into foreign currency.
c. buys more goods at home than abroad.
d. buys as many goods at home as it does abroad.
e. appreciates in value against foreign currency.

Question 2

Whenever there is a deficit in the current account, the capital account:
a. will be negative.
b. will be positive.
c. will be zero.
d. could be negative, positive, or zero.