The rate of exchange that allows a specific amount of currency in one country to purchase the same quantity of goods in another country is called
A) the real rate of exchange.
B) the nominal rate of exchange.
C) purchasing power parity.
D) current account exchange.

Question

Quizplus · Accepted Answer

This is the definition of purchasing power parity. The real and nominal exchange rates do not specifically refer to the ability to purchase goods in another country, and current account exchange is not a commonly recognized term.

The Rate of Exchange That Allows a Specific Amount of Currency