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Exceptions to Purchase Power Parity Exist If Arbitrage Opportunities Are

question 97

True/False

Exceptions to purchase power parity exist if arbitrage opportunities are limited by characteristics such as perishability or high transportation costs.


Definitions:

Quotas

Restrictions set by governments on the amount of a certain good that can be imported or exported.

World Price

The price of a good that is traded on the global market.

Imported

Products or services that are brought into one country from another for sale.

Tariff

A tax imposed by a government on goods and services imported from other countries, often used to protect domestic industries from foreign competition.

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