Purchasing power parity is a principle that states that exchange rates are set so that the prices of similar products in different countries are about the same.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is a principle that suggests that exchange rates adjust so that the cost of similar goods in different currencies is equalized. This theory implies that exchange rates should reflect the relative costs of identical goods across different countries, with adjustments for transportation costs and other factors. So, the answer is true.

Purchasing Power Parity Is a Principle That States That Exchange