Question

Purchasing power parity (PPP): a. almost never holds completely. b. is as commonly accepted as the law of demand. c. is a reason why all economies have left the gold standard. d. represents the universality of exchange rate systems.

Answer 1

Answer:

The correct answer is letter "D": represents the universality of exchange rate systems.

Explanation:

Purchasing Power Parity or PPP compares different countries' currencies through a market's basket of goods approach. Two currencies are in PPP when a market basket of goods, taking into account the exchange rate is priced the same in both countries. PPP currency rates are considered more accurate than market-exchange rates.