Author Question: Purchasing power parity holds when the exchange rate is equal to the product of the foreign price ... (Read 66 times)

future617RT · **on:** Jun 30, 2018

Purchasing power parity holds when the exchange rate is equal to the product of the foreign price level and the domestic price level.
a. True
b. False
Indicate whether the statement is true or false

Question 2

If the dollar depreciates relative to other currencies, which of the following is true?
a. It takes more of the other currency to buy a dollar.
b. It takes less of the other currency to buy a dollar.
c. There is no change in the amount of the currency needed to buy a dollar.
d. Not enough information to determine.