Whatis the principle that states exchange rates are set so that the prices of similar products in different countries are about the same. Balance of trade Purchasing power parity GDP per capita Nominal GDP IDON'T KNOWYET

Question

Whatis the principle that states exchange rates are set so that the prices of similar products in different countries are about the same. Balance of trade Purchasing power parity GDP per capita Nominal GDP IDON'T KNOWYET

Answer 1

'B' (Purchasing power parity)

Answer 2

## Step 1The problem is asking for the principle that states exchange rates are set so that the prices of similar products in different countries are about the same. This is a concept in economics, specifically in the field of international finance and exchange rates.## Step 2The principle that states exchange rates are set so that the prices of similar products in different countries are about the same is known as Purchasing Power Parity (PPP). ## Step 3Purchasing Power Parity (PPP) is an economic theory that compares different countries' currencies through a market "basket of goods" approach. According to this theory, two currencies are in equilibrium or at par when a basket of goods is priced the same in both countries, taking into account the exchange rate.

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Whatis the principle that states exchange rates are set so that the prices of similar products in different countries are about the same. Balance of trade Purchasing power parity GDP per capita Nominal GDP IDON'T KNOWYET

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