Final answer:
The statement that when the value of money is high, price level is low is generally true, as it suggests low or moderate inflation levels. However, a country with hyperinflation is less likely to have an exchange rate equal to its PPP value, compared to a country with low inflation.
Step-by-step explanation:
The statement is generally true. When the value of money is high, it indicates that inflation is low or moderate, and therefore, the price level is relatively low. However, the relationship between the value of money and the price level is influenced by many factors, including supply and demand dynamics for the currency, the economic policies of a country, and external market conditions.
A country experiencing hyperinflation is less likely to have an exchange rate that equals its purchasing power parity (PPP) value compared to a country with a low inflation rate. Hyperinflation leads to a rapidly decreasing value of the currency due to a high supply and low demand, leading to prices rising quickly. This increases the volatility of the exchange rate and undermines the strength of the currency, making it diverge significantly from its PPP value.