# Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ? Correct Answer: B. anticipate the dollar to appreciate against the euro. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ?

Direct Answer & Quick Reference

The correct option is **B. anticipate the dollar to appreciate against the euro**.

A. anticipate the dollar to depreciate against the euro

B. anticipate the dollar to appreciate against the euro **(Correct Answer)**

C. anticipate the dollar’s exchange rate against the euro to remain constant

D. have no anticipation concerning future movements in the dollar/euro exchange rate

✨ Explain with AI

Verified Key: B. anticipate the dollar to appreciate against the euro
Solved by 2,095+ students

Verified against official examination board answer keys and standard curriculum textbooks.

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