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According to the theory of purchasing-power parity, the nominal exchange rate between two countries must reflect the differing _________.

1 Answer

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Answer:

Price level in those country

Step-by-step explanation:

Purchasing power parity is a measured price at a different location.

It is a measure between two places using the same currency.

With the help of PPP, we can decide the countries purchasing power more the purchasing power of the country strong is the currency of the country.

the nominal exchange rate between two countries reflects the differing price level of those countries.

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