What Is Required for Absolute Purchasing Power Parity to Hold

question 14

Essay

What is required for absolute purchasing power parity to hold?
Do you think absolute PPP would hold in the case where a computer retailer in the U.S. sits directly across the border from a computer retailer in Canada?
How about Houston,Texas,and Winnipeg,Manitoba?

---

Definitions:

Taxes

Mandatory monetary payments or different forms of assessments levied on taxpayers by government bodies to support government expenditures and a range of public spending.

Legal Immigrants

Individuals who have been authorized by a country to live and work there permanently or for a specified period.

Demand for Labor

The quantity of workers that employers are willing and able to hire at given wages over a specific time period, reflecting the need for labor to produce goods and services.

Inelastic

Inelastic describes a situation where the demand or supply of a good or service is relatively unresponsive to changes in price.