The University of Pennsylvania researchers Summers and Heston compute the price level of GDP as the ratio of purchasing power parity (PPP) exchange rate to the actual exchange rate where ?
Correct answer: A. both exchange rates are measured s the domestic currency price of the US-dollar
- A. both exchange rates are measured s the domestic currency price of the US-dollar
- B. both exchange rates are not converted into international dollars
- C. both exchange rate are pegged
- D. both exchange rate are converted into Big Mac PPP formula
Explanation
The GDP price level compares the PPP exchange rate with the actual market exchange rate, with both expressed as domestic-currency units per US dollar. This makes option a the intended description.
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