A. liquidated power parity
B. purchasing power parity
C. selling power parity
D. volatile power parity
✅ The correct answer is option B.
Theory which considers change in exchange rate with fluctuations in inflation rates is classified as purchasing power parity. Purchasing power parity (PPP) is an economic theory that compares different countries’ currencies through a “basket of goods” approach.
Theory which considers change in exchange rate with fluctuations in inflation rates is classified as purchasing power parity. Purchasing power parity (PPP) is an economic theory that compares different countries’ currencies through a “basket of goods” approach.