According to the Theory of Purchasing Power Parity,why Should Identical

question 86

Multiple Choice

According to the theory of purchasing power parity,why should identical goods have the same price in different locations?

• A) To prevent price gouging, international law mandates that identical goods must be sold for the same currency-adjusted price across all locations.
• B) If the goods were two different prices, it would cause an increase in supply of the good at the low-price location and a decrease in supply of the good at the high-price location, which would cause the prices in each location to converge to the same price.
• C) If the goods were two different prices, it would cause an increase in supply of the good at the high-price location and a decrease in supply of the good at the low-price location, which would cause the prices in each location to converge to the same price.
• D) If the goods were two different prices, it would cause a decrease in demand of the good at the low-price location and an increase in demand of the good at the high-price location, which would cause the prices in each location to converge to the same price.
• E) If the good were two different prices, it would cause an increase in demand of the good solely at the low-price location until that good reached the same price as the good in the high-price location.

---

Definitions:

Absenteeism

The habit or practice of frequently being absent from work or other duties without good reason.

Personal Communication

Direct exchange of information, thoughts, or messages between individuals through verbal or non-verbal means, emphasizing the personal context.

Active Listening

The practice of fully concentrating on what is being said rather than just passively 'hearing' the message of the speaker.

Theory X Assumptions

A management theory assuming that workers have little ambition, dislike work, and will avoid responsibility and therefore need to be closely supervised.