📊 Business Economics
Q. Which of the following is not an assumption of the Purchasing Power Parity theory? _
  • (A) There are no trade barriers between countries
  • (B) The price index for each of the two countries must be comprised of the same basket of goods
  • (C) All the prices should be indexed to the same year
  • (D) Changes in the exchange rate changes internal price level
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✅ Correct Answer: (D) Changes in the exchange rate changes internal price level

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