Asked by

nellie bykova
on Nov 07, 2024

verifed

Verified

The notion that exchange rates adjust to keep the purchasing power of a currency constant across countries is called:

A) The unbiased forward rates condition.
B) Uncovered interest rate parity.
C) The international Fisher effect.
D) Purchasing power parity.
E) Interest rate parity.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a basket of goods approach to find the relative values of the currencies.

Exchange Rates

The value of one currency expressed in terms of another currency, affecting international trade and investments.

  • Understand the impact of inflation rates on the appreciation or depreciation of currency values.
verifed

Verified Answer

TA
TyNiesha AndersonNov 08, 2024
Final Answer:
Get Full Answer