One reason why purchasing power parity may not work perfectly is that transportation costs reduce trading possibilities

What do taxes do?

(a) Impact the incentive to use resources efficiently (b) Transfer income from the person or entity paying taxes to other individuals or entities (c) Affect the relative prices of goods, services and resources (d) All of the above

Suppose the official gold value of the Brazilian real changes from 527 reals per ounce to 508 reals per ounce. We can then say that:

a. the Brazilian real has depreciated in value as a consequence of free market fluctuations. b. the Brazilian real has appreciated in value. c. gold is now more expensive to purchase in Brazil than it was before. d. the Brazilian real has been devalued. e. the Brazilian economy is expected to experience rapid inflation.