Purchasing Power Parity Would Likely Not Hold Because of All

question 100

Multiple Choice

Purchasing power parity would likely not hold because of all the following EXCEPT

• A) high transportation costs.
• B) goods that are not tradable.
• C) fluctuations in foreign exchange rates.
• D) tariffs and quotas.

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Definitions:

Inventories

The raw materials, work-in-progress goods, and finished goods that a company holds for the purpose of sale in the future.

Consumer Durables

Goods that are not for immediate consumption and are able to be used over a longer period, like appliances and vehicles.

Equipment And Software

Tangible assets such as machinery and tools, and intangible assets like software, used in the operation of a business to produce goods or services.

Productive Capacity

The maximum output a company or economy can produce with its current resources, also reflecting the efficiency of production processes.