Nontradables are cited as a reason why purchasing power parity doesn't hold because:
A. there is no economic opportunity to profit if the goods cannot be sold in another market for another price.
B. location-specific goods are impossible to calculate a price elsewhere for.
C. goods that you can't transport cannot be sold for a profit elsewhere, even if the price differs in different locations.
D. All of these statements are true.
Answer: D
Economics
You might also like to view...
If there are equal rates of return between assets in two currencies, then there is
A) purchasing power parity. B) interest rate parity. C) parity of exchange. D) foreign exchange parity.
Economics
Use the graph above to answer the following question. What can we conclude about the attitude towards risk this individual is portraying given this utility function?
What will be an ideal response?
Economics