All of the Following Options Are Some of the Factors

question 32

Multiple Choice

All of the following options are some of the factors that cause deviations from absolute PPP EXCEPT:

• A) transaction costs.
• B) non-traded goods.
• C) balance of payments.
• D) changes in relative prices.

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Definitions:

Synergy

Notion that a combined firm is worth more than the two firms are individually.

Merger

Agreement in which two or more firms combine to form one company.

Acquisition

Agreement in which one company purchases another.

Leverage

Increasing the rate of return on funds invested by borrowing funds.