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If purchasing-power parity holds, then the value of the (1 Puan) a. real exchange rate is equal to one. A dollar buys the quantity

 

If purchasing-power parity holds, then the value of the (1 Puan) a. real exchange rate is equal to one. A dollar buys the quantity of foreign currency equal to the U.S. price level divided by the foreign country's price level. b. real exchange rate is equal to one. A dollar buys as many goods in the U.S. as it does overseas. c. nominal exchange rate is equal to one. A dollar buys as many goods in the U.S. as it does overseas. d. nominal exchange rate is equal to one. A dollar buys the quantity of foreign currency equal to the U.S. price level divided by the foreign country's price level.

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