The _______ states that goods that are easily tradable across two countries should sell at the same price, expressed in a common currency.

Question

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The law of one price states that goods that are easily tradable across two countries should sell at the same price, expressed in a common currency. This is because arbitrage opportunities will arise if the prices differ, and traders will buy the cheaper good and sell it in the more expensive country until the prices equalize. The other options (A) trade feedback effect, (B) price feedback effect, and (D) balance of trade effect are not related to this concept.

The _______ States That Goods That Are Easily Tradable Across