Detailed explanation and options for the selected question.
What is the significance of “Purchasing Power Parity” (PPP)?
A.
It shows the exchange rate volatility
B.
It compares the cost of goods in different countries
C.
It determines trade balances
D.
It measures inflation across countries
Explanation:
PPP compares the cost of goods and services between countries, reflecting relative currency value. It does not directly measure inflation or trade balances.