Which of the following is a limitation of the Purchasing Power Parity (PPP) theory? a It applies only to large economies. b It considers only tradable goods, excluding non-tradable services. c It assumes that exchange rates are solely determined by interest rates. d It states that currencies are always stable and predictable.

Which of the following is a limitation of the Purchasing Power Parity (PPP) theory? a It applies only to large economies. b It considers only tradable goods, excluding non-tradable services. c It assumes that exchange rates are solely determined by interest rates. d It states that currencies are always stable and predictable.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter34: International Finance

Section: Chapter Questions

Problem 6QP

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