Which One of These Must Be True If Absolute Purchasing

question 62

Multiple Choice

Which one of these must be true if absolute purchasing power parity is to absolutely hold?

• A)Customer preferences for an item must be identical across markets.
• B)There must be greater demand for the item in one area as compared to another area.
• C)Forward rates must equal spot rates.
• D)The goods traded must have a feature unique to each individual market.
• E)Transaction costs must be imposed on both ends of a trade.

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Definitions:

Blogs

Online platforms or websites where individuals or groups write entries about various topics in an informal or conversational style.

Profiles

Descriptions or outlines of an individual's personal, educational, or professional backgrounds and characteristics.

Shoppers

Individuals who engage in the activity of searching for and buying goods or services from stores or online platforms.

Flow Of Information

The movement of information from one place to another, in the context of a process or system.