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What is the Purchasing Power Parity ( PPP ) theory? A . Exchange rates should adjust to equalize the price of identical goods in different

What is the Purchasing Power Parity

(

PPP

)

theory?

.

Exchange rates should adjust to equalize the price of identical goods in different countries.

.

Exchange rates are determined by interest rate differentials.

.

Exchange rates are set by government interventions.

.

Exchange rates are based on historical prices.

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