Q.1) Consider the following statements about the foreign exchange market:
(1) If real exchange rate is equal to one, currencies are at purchasing power parity.
(2) Purchasing power parity is often taken as a measure of a country's international competitiveness.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2