Which of the Following Statements Is the MOST Accurate

question 13

Multiple Choice

Which of the following statements is the MOST accurate?

• A) If PPP holds true, then the law of one price holds true for every commodity as long as the reference baskets used to reckon different countries' price levels are the same.
• B) If the law of one price holds true for every commodity, PPP must hold automatically.
• C) If the law of one price holds true for every commodity, PPP must automatically hold as long as the reference baskets used to reckon different countries' price levels are the same.
• D) If the law of one price does not hold true for every commodity, PPP cannot be true as long as the reference baskets used to reckon different countries' price levels are the same.
• E) If PPP holds true, then the law of one price must hold true automatically.

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Definitions:

Polluted Stream

A body of flowing water that is contaminated with harmful chemicals, waste, or microorganisms, affecting its quality and the health of ecosystems it supports.

Volcanic Lava

Volcanic lava is molten rock expelled by a volcano during an eruption, which solidifies as it cools, forming new rock formations.

Frequent Fires

Recurring combustion events that occur with high frequency in a particular area, significantly affecting ecosystems and human activities.

Giant Sequoia

A species of tree known for its immense size and longevity, native to the Sierra Nevada mountain range in California; it is among the largest living organisms on earth.