The following options are all important reasons to study the theory of PPP EXCEPT Group of answer choices a. It provides a baseline forecast of future exchange rates that is usually considered whenever it is necessary to forecast future cash flows in different currencies. b Deviations from PPP significantly affect the profitability of firms. c. It is particularly useful in assessing cost-of-living differences across countries. d The deviations from the theory are very small when it comes to the determination of exchange rates.

The following options are all important reasons to study the theory of PPP EXCEPT Group of answer choices a. It provides a baseline forecast of future exchange rates that is usually considered whenever it is necessary to forecast future cash flows in different currencies. b Deviations from PPP significantly affect the profitability of firms. c. It is particularly useful in assessing cost-of-living differences across countries. d The deviations from the theory are very small when it comes to the determination of exchange rates.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 25CTQ: If a countrys currency is expected to appreciate in value, what would you think will be the impact...

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