Which exchange rate theory focuses on the inflation exchange rate relationship?

Which exchange rate theory focuses on the inflation exchange rate relationship? Correct Answer Purchasing power parity

Purchasing power parity theory focuses on the inflation exchange rate relationship. It states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.
Bissoy MCQ

Related Questions

An inflation rate includes in bond's interest rates is one which is inflation rate
Theory which considers change in exchange rate with fluctuations in inflation rates is classified as
If nominal interest rate is 10% and inflation rate is 4% what is the real interest rate?
The exchange rate is the ruling official rate of exchange of dollars for other currencies . It determines the value of American goods in relation to foreign goods. If the the dollar is devalued in terms of other currencies , American exports ( which are
The exchange rate is the ruling official rate of exchange of Taka for other currencies. It determines the value of Bangladeshi goods in relation to foreign foods. If the Taka is devalued in terms other currencies Bangladeshi exports (which are paid for in Taka ) become cheaper to foreigners and Bangladeshi imports become more expensive to holders of Taka. What conclusion can be drawn form the information above?
What denotes in the fall in the exchange rate of one currency in terms of the others? This term is usually applies to the floating exchange rate.
The nominal interest rate minus the expected rate of inflation ---
Bangladesh adopted floating exchange rate system of foreign exchange on :
Which of the following frameworks focuses on DOM and Ajax utilities?
Which type of e‐commerce focuses on consumers dealing with each other?