If the inflation rates of two countries are both equal to the percentage change in the exchange rate,then absolute purchasing power parity holds.

Name: If the inflation rates of two countries are both equal to the percentage change in the exchange rate,then absolute purchasing power parity holds.
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Quizplus · Accepted Answer

Absolute purchasing power parity holds when the price levels between two countries are equal when expressed in a common currency, not merely when inflation rates and exchange rate changes are equal.

If the Inflation Rates of Two Countries Are Both Equal