A theory of international exchange which holds that, the price of similar goods in different countries is the same, this theory is known as the:
A theory of international exchange which holds that, the price of similar goods in different countries is the same, this theory is known as the:
Solution
✅ Correct Option: 1
Purchasing Power Parity theory holds that exchange rates adjust so that similar goods cost the same across countries when expressed in a common currency (the law of one price applied internationally).
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