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Exchange Rates: Purchasing Power Parity
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Exchange Rates: Purchasing Power Parity
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23. Exchange Rates / Exchange Rates: Purchasing Power Parity / Problem 4
Problem 4
How do exchange rate adjustments help maintain Purchasing Power Parity?
A
They have no impact on arbitrage opportunities.
B
They align currency values with price levels, eliminating arbitrage opportunities.
C
They create new arbitrage opportunities by destabilizing currency values.
D
They are irrelevant to the concept of Purchasing Power Parity.
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