The PPP Theory Fails in Reality for All of the Following

question 50

Multiple Choice

The PPP theory fails in reality for all of the following reasons EXCEPT

• A) transport costs.
• B) monopolistic or oligopolistic practices in goods markets.
• C) the inflation data reported in different countries are based on different commodity baskets.
• D) restrictions on trade.
• E) inflation rates are unrelated to money supply growth.

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Definitions:

Nationalizing Industries

The transfer of private sector enterprises to the ownership and operation of the government with the goal of taking control over critical industries or resources.

Public Works

Infrastructure projects financed and constructed by the government for recreational, employment, and health and safety uses in public spaces, including roads, bridges, and parks.

Herbert Hoover

The 31st President of the United States, serving from 1929 to 1933, whose term was marked by the onset of the Great Depression.

Douglas MacArthur

An American five-star general and Field Marshal of the Philippine Army who played a prominent role in the Pacific theater during World War II.