What is purchasing power parity? Why might it not hold?
What will be an ideal response?
Purchasing power parity is the idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency. Purchasing power parity may not hold because countries produce different baskets of goods and services, because some goods and services aren't traded internationally, and because transportation and legal barriers may prevent prices of traded goods from being equalized.
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Mutual interdependence among firms is one of the key characteristics of an oligopoly market that distinguishes it from the other three major market structures
Indicate whether the statement is true or false
The phase of the business cycle characterized by rising employment is called
a. a recession b. a low-tax phase c. a high-inflation phase d. an expansion e. a depression
Researchers have found that countries that were settled by Europeans who planned on staying permanently were
a. more likely to protect private ownership rights and limit the power of the government. b. less likely to protect private ownership rights and limit the power of the government. c. more likely to protect private ownership, but less likely to limit the power of the government. d. less likely to protect private ownership, but more likely to limit the power of the government.
Which of the following is correct regarding road tolls as a way to reduce traffic?
a. They can vary based on the amount of traffic that is present. b. They reduce drivers' explicit cost of driving but increase drivers' implicit cost. c. Some drivers can be made better off, but some drivers will inevitably made worse off. d. They are the solution to the free rider problem that occurs on roads.