If the law of one price holds for a single good, then absolute PPP measured with price indexes will also hold
Indicate whether the statement is true or false
FALSE
Explanation: Since consumers in different countries consume different goods, price indexes are not directly comparable internationally. Thus using price indexes to measure PPP creates problems and causes deviations from PPP.
Economics
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When people make choices they typically know with certainty which choice is best
a. True b. False Indicate whether the statement is true or false
Economics
When banks create money, they
a. increase wealth at a pace equal to the rate of money creation b. destroy wealth at a pace equal to the rate of money creation c. increase wealth at a rate exceeding the rate of money creation d. increase wealth at a rate less than the rate of money creation e. do not create wealth
Economics