The correct answer is: A. 1922.
Purchasing power parity (PPP) is a theory of exchange rates that states that in the long run, exchange rates between currencies will adjust in such a way that the purchasing power of money will be the same in each country. This means that if a basket of goods costs $100 in the United States and â¬100 in Europe, then the exchange rate between the US dollar and the euro should be $1 = â¬1.
The PPP theory was first proposed by Gustav Cassel in 1922. Cassel was a Swedish economist who was interested in the problem of hyperinflation. He argued that the exchange rate between two currencies should be based on the relative purchasing power of those currencies.
The PPP theory has been used to explain exchange rate movements in the past. However, it is not always a reliable predictor of future exchange rates. This is because there are many factors that can affect exchange rates, including interest rates, inflation, and political stability.
Despite its limitations, the PPP theory is a useful tool for understanding exchange rates. It can help to explain why exchange rates change over time and to identify undervalued or overvalued currencies.
The other options are incorrect because they are not the year in which Gustav Cassel proposed the PPP theory.