According to the text, which of the following factors may make the theory of purchasing power parity unrealistic?
A) Purchasing power parity works only with traded goods.
B) Trading countries may stop exchanging goods once prices between them equalize.
C) Shipping, insurance, and transaction costs may reduce the implication of purchasing power parity.
D) Prices may not equalize if goods arbitrage is reduced by trade barriers.
E) The effects of purchasing power parity may not show up until many years have passed.
B
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The degree to which people have access to goods and services that make their lives easier, healthier, safer, and more enjoyable is called the:
A. scarcity standard B. microeconomic standard C. standard of living. D. global standard
The existence of heterogeneous preferences for government is an economic argument for a federal system of government
a. True b. False
In the consumer-choice model, the economist examines how the consumer's purchases change when there is a change in prices or income. Which stage of economic analysis is this procedure a part of?
a. Formulation. b. Optimization. c. Equilibrium. d. Economic dynamics.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.