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: Option 1: Purchasing power parity Option 2: Real exchange rate Option 3: Interest arbitrage theory Option 4: Fixed exchange rate

The answer is 'Purchasing power parity'. View full solution:

CUET Economics - 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: | PYQs + Solutions

CUET Economics 2026 13th May Shift 1

Macro

Easy

Purchasing power parity

Real exchange rate

Interest arbitrage theory

Fixed exchange rate

✅ Correct Option: 1

Related questions:

CUET Economics 2022 Slot 1

Which of the following is not a component of current account:

14 May Shift 1

Match List-I with List-II

List–I	List–II
(A) Devaluation	(I) Price of foreign currency in terms of domestic currency increase
(B) Revaluation	(II) Price of domestic currency in terms of foreign currency increases
(C) Depreciation	(III) Increase the exchange rate by the action of the Government
(D) Appreciation	(IV) Decreases the exchange rate by the action of the Government

Choose the correct answer from the options given below:

14 May Shift 1

Which of the following are called 'above the line' in the balance of payments?