Question

Which formula represents Exchange Rate (PPP)?

विकल्प

• \[\text{Exchange Rate (PPP)}=\frac{\text{Foreign Price}}{\text{Domestic Price}}\]

• \[\text{Exchange Rate (PPP)}=i_A-i_B\]

• \[\text{Exchange Rate (PPP)}=\frac{\text{Domestic Price}}{\text{Foreign Price}}\]

• \[\text{Exchange Rate (PPP)}=\text{Domestic Price}+\text{Foreign Price}\]

Answer 1

The PPP exchange rate is calculated by dividing Domestic Price by Foreign Price. Thus, \[\text{Exchange Rate (PPP)}=\frac{\text{Domestic Price}}{\text{Foreign Price}}\].