What are the main reasons for deviations from PPP? Give, at least, 5 reasons with a short explanation
What will be an ideal response?
? The presence of non-traded goods prices in price indexes
? Financial asset prices adjust faster than goods prices due to the slow adjustment in goods markets
? Relative price changes
? Different consumption bundles across countries
? Differentiated goods
? Shipping costs, tariffs
? News, unexpected events
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An R2 close to 1
A) does not happen with real data. B) indicates that almost all of the variation in the dependent variable is explained by the regression. C) does not explain variation as well as an R2 that is above 2. D) means that the regression line does not fit the data very well.
Abstraction can lead to gross distortions of pertinent facts
a. True b. False Indicate whether the statement is true or false
Based on the transactions in the above table, what is the change in the U.S. financial account?
A. -$20,000 B. $9,800 C. -$20,200 D. $10,000
Referring to the Economics in Practice on page 320: A successful celebrity endorsement of a product will most likely ________ for the product, resulting in a higher equilibrium price and a larger equilibrium quantity.
A. increase the supply B. decrease the demand C. decrease the supply D. increase the demand