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If the Prices for the Same Goods and Services Are

Question 45

Multiple Choice

If the prices for the same goods and services are different in two nations, the exchange rate adjusts over the long run to achieve


A) zero net exports for each nation.
B) purchasing power parity between the two currencies.
C) balance of payments account between the two nations equal to zero.
D) interest rate parity.
E) a zero current account balance between the two nations.

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