The purchasing power parity theory has limitations in forecasting exch – McqOptions

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1.	The purchasing power parity theory has limitations in forecasting exchange rate fluctuations for all of the following reasons except ?
A.	inflation effects exchange rates
B.	international capital flows affect exchange rates
C.	governments sometimes impose trade restrictions such as tariffs and quotas
D.	not all products are internationally tradeable
Answer» B. international capital flows affect exchange rates

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