Which of the Following Is an Explanation for the Failure

question 146

Multiple Choice

Which of the following is an explanation for the failure of PPP theory to predict exchange rates more accurately?

• A)It assumes away transportation costs and trade barriers.
• B)It does not take into account the law of one price.
• C)It uses a small sample size of goods.
• D)It assumes that the markets are not efficient.

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Definitions:

Authorization

The process of giving someone the right or power to do something, often through a formal or legal document.

Union

An organization formed by workers to protect their rights, improve working conditions, and negotiate with employers on wages and other employment terms.

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Actions taken by workers, typically involving stopping work, to protest working conditions or other labor issues.

WWI

World War I, a global conflict that lasted from 1914 to 1918, involving many of the world's great powers, organized into two opposing alliances: the Allies and the Central Powers.