Purchasing Power Parity Holds If

question 34

Multiple Choice

Purchasing power parity holds if

• A)countries are small and underdeveloped.
• B)inflation is low so purchasing power increases.
• C)real wage rates adjust so that purchasing power is the same across all countries.
• D)purchases are made in the short run and long run.
• E)prices of all goods in the world economy were equal, corrected for nominal exchange rates.

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Durkheim's View

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