In View of the Fact That PPP Is the Manifestation

question 71

Multiple Choice

In view of the fact that PPP is the manifestation of the law of one price applied to a standard commodity basket,

• A)it will hold only if the prices of the constituent commodities are equalized across countries in a given currency.
• B)it will hold only if the composition of the consumption basket is the same across countries.
• C)both a and b
• D)none of the above

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Definitions:

Components

Basic elements or parts that make up a system or compound.

Standard Deviation

A measure of the dispersion or variability of a set of values, indicating how much from the average (mean) individual values typically differ.

SPSS

Statistical Package for the Social Sciences; a software package used for interactive, or batched, statistical analysis.

Scatter Plot

A graphical representation using Cartesian coordinates to display values for typically two variables for a set of data.