According to purchasing-power parity,if it took 58 Indian rupees to buy a dollar today,but it took 55 to buy it a year ago,then the dollar has
A)appreciated,indicating inflation was higher in the U.S.than in India.
B)appreciated,indicating inflation was lower in the U.S.than in India.
C)depreciated,indicating inflation was higher in the U.S.than in India.
D)depreciated,indicating inflation was lower in the U.S.than in India.

Question

Quizplus · Accepted Answer

The dollar has appreciated because it now takes more Indian rupees to buy a dollar. This suggests that inflation was lower in the U.S. than in India, as the purchasing power of the dollar has increased relative to the rupee.

According to Purchasing-Power Parity,if It Took 58 Indian Rupees to Buy