According to purchasing-power parity theory, the nominal exchange rate between the U.S. and another country should equal the U.S. price level divided by the price level in the foreign country.

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According to purchasing-power parity (PPP) theory, the nominal exchange rate between two countries should equal the ratio of the foreign price level to the U.S. price level, not the U.S. price level divided by the foreign price level.

According to Purchasing-Power Parity Theory, the Nominal Exchange Rate Between