Question

Purchasing power parity (PPP) a. Is similar to the law of one price b. States that...

Purchasing power parity (PPP)

a. Is similar to the law of one price

b. States that the prices of baskets of goods (price levels) will tend to be the same across borders in the long run, allowing for exchange rates

c. Requires that, under fixed exchange rates, price levels adjust in the different markets to achieve comparability across borders (allowing for exchange rates)

d. All of the above

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